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Washington’s First Party Bad Faith Law

Yesterday, Washington Governor Christine Gregoire’s signed into law a bill that strengthens Washington’s first-party bad faith law. Maryland recently passed its own first-party bad faith law but Washington’s is much stronger. Although the Washington law regrettably excludes health insurers, it eases the stringent requirements for first-party bad faith lawsuits, allowing policyholders mistreated unreasonably by their own insurance company to recover three times the actual damages. Now that is a first-party bad faith bill was some real teeth. The Washington law also allows for an award of attorneys’ fees and costs to the claimant.

I’m hoping that the success of the new first-party bad faith bill will bring about a more stringent law in Maryland. Virginia, which has a similar statute to Maryland’s (Virginia Annotated Code §38.2-209), could also use a stronger law that will do more to discourage insurance companies from making the motto of “taking premiums and denying claims,” which is a common business practice in Maryland and Virginia.

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