Insureds should be able to assign bad-faith claims against their carriers to injured third parties, the state Supreme Court has ruled in a question posed to the justices by the U.S. Court of Appeals for the Third Circuit.
The ruling effectively allows a plaintiff injured by a drunken driver to collect a $50,000 bad-faith award against the carrier, which had refused to settle the underlying case. The Third Circuit sought the justices’ advice following differing decisions out of the Eastern and Middle Districts of Pennsylvania on whether a tortfeasor can assign rights to pursue bad-faith claims to the plaintiff.
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