The Hangarter v. Provident case set an important precedent in bad faith insurance litigation. The court ruled in favor of the plaintiff, Joan Hangarter, after finding that Provident Life & Accident Insurance Company unfairly denied her disability claim. The verdict reinforced the legal responsibilities of insurers to act in good faith and deal fairly with policyholders.
Holding insurance companies accountable
This case showed that courts would hold insurance companies accountable for unfair claim denials. The jury found that Provident had no reasonable basis to deny Hangarter’s claim and acted with malice, oppression, or fraud. This ruling reinforced that insurers cannot use deceptive tactics to avoid paying legitimate claims.
Defining bad faith in insurance disputes
The case helped clarify what constitutes bad faith in insurance claims. Provident misrepresented policy terms and ignored medical evidence supporting Hangarter’s disability. Courts used this case to highlight that insurers must thoroughly investigate claims and provide valid reasons for denial. Any deliberate effort to mislead or withhold payments may qualify as bad faith.
The role of expert testimony
Expert testimony played a key role in this case. Medical and insurance industry experts testified that Provident used unfair claim evaluation practices. Their statements helped prove that the insurer intentionally denied a valid claim. This case emphasized the importance of expert witnesses in bad faith insurance lawsuits.
Legal protections for policyholders
The ruling in Hangarter v. Provident strengthened legal protections for consumers. It demonstrated that policyholders could challenge unfair denials and win significant compensation. The verdict awarded Hangarter both contract damages and punitive damages, discouraging other insurers from engaging in similar conduct.
Hangarter v. Provident remains a key case in bad faith insurance law. It established that insurers must act in good faith and fairly evaluate claims. Courts continue to cite this case when ruling on insurance disputes, ensuring that policyholders have a legal path to challenge wrongful denials.
