The New Jersey Insurance Fair Conduct Act: Thoughts On How Recent Cases Interpret And Define The Contours Of The Act

The $1.88 million jury verdict in a New Jersey underinsured motorist (‘UIM’) claim, Kelley v. Massachusetts Bay Insurance Company, No. 19-cv-19037 (D. N.J. May 13, 2022) drew headlines in legal and insurance media recently.

One article suggested that the insurer defendant might be facing treble damages and be ordered to pay Kelly’s attorney fees under the newly enacted New Jersey Insurance Fair Conduct Act, N.J.S.A. §17:29BB-1, et seq.

Kelley had received the $50,000 policy limits from the tortfeasor, and the trial concerned Kelley’s UIM claim under her employer’s motor vehicle policy which had $1,000,000 in UIM benefits. The highest offer allegedly made before trial was $350,000.00.

Kelley’s attorney was quoted as stating that Massachusetts Bay allegedly showed bad faith by more than merely failing to settle for a reasonable amount. Kelley’s attorney alleged that Massachusetts Bay engaged in dilatory and abusive claims handling by requesting irrelevant records, failing to keep the insureds apprised of the status of the claim at proper intervals, and harassing the insured with character attacks.

‘There was an issue as to how they conducted themselves during discovery, issuing a subpoena, last-minute attempts at identifying new witnesses, that was done within days of the trial,’ Kelley’s attorney was quoted as saying.