Nationwide Was Ordered To Pay $18 Million In Punitive Damages For Acting In Bad Faith In A Property Damage Case

  • July 17, 2014
  • Blog

Nationwide was ordered to pay $18 million in punitive damages for acting in bad faith in a long-suffering property damage case decided in Berks County, Pennsylvania last month.  Judge Jeffrey K. Sprecher slammed Nationwide for following a “litigation strategy” that called for it to unfairly fight smaller claims tooth and nail. In this case, a couple insured by Nationwide needed their car fixed after it was struck by another vehicle in an accident in 1994. Instead of simply paying the $25,000 value of the totaled vehicle, Nationwide  engaged in an extensive cover-up, hid crash photos, misled the insureds about the nature of the damage to their car and had it fixed even after the first mechanic said the frame was bent and the vehicle was a total loss. Nationwide did so in order to pay only $12,500 in property damage.

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Nationwide paid more then $3 million to fight the claim since 1994 for a vehicle worth $25,000. It makes any insured disbelieve that Nationwide is “on their side” as its commercials promise.

Judge Sprecher found Nationwide’s business practices appalling, noting that Nationwide’s tough stance on smaller claims helped the company save hundreds of thousands of dollars each year at the expense of its own policy holders. The reasoning for Nationwide was that people would not spend the time, money and effort on fighting smaller claims. As the judge noted, Nationwide was willing to risk the Bergs’ lives by fixing an unsafe vehicle to save itself money on a collision claim. He further said the company had bet on on the idea that “what plaintiff, and more importantly, what lawyer in his right mind” would pursue such a case year after year?

Daniel Berg, whose wife Sherri’s vehicle had been the subject of the underlying claim, was thankful to his legal team at the Mayerson firm for their hard work and dedication fighting this case for 20 years. Unfortunately, Sherri Berg died of cancer just seven weeks before the judge’s ruling.

Congratulations to the Berg family and to Hy Mayerson, Benjamin Mayerson, and Margaret Connors at the Mayerson firm for tirelessly fighting Nationwide and its abysmal corporate practices.

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