CUNA Mutual Liable For $6.2M In Bad Faith Insurance Case; Fraudulent Practices Uncovered

A South Dakota jury found Wisconsin based CUNA Mutual Insurance Society liable for $6.2 million in a bad faith disability insurance lawsuit. The trial exposed a long history of fraudulent claims practices against the cooperative and credit union provider of financial services – and now the insurer is doing anything it can to avoid further lawsuits.

Taking bad faith to a whole new level

This bad faith insurance lawsuit involves conduct which most people would say takes bad faith to a whole new level. According to news reports, Teri Powell was a high school teacher in Rapid City, South Dakota for over 25 years. She became very ill in 2002, developing rheumatoid arthritis, osteoarthritis, progressive joint disease, spinal scoliosis and other ailments, and was forced to retire from teaching.

Although she had disability insurance with CUNA Mutual Insurance Society, she tried to support herself by pet sitting and doing other odd jobs which didn’t interfere with her disability as much. She found out that she had cancer in 2005 and finally filed a claim with CUNA. However, CUNA denied her claim by saying that it needed to investigate whether she was disabled – and then did nothing. Even though Powell continually followed up, CUNA continually ignored her requests up until the day she died in 2006.

$6.2 million verdict

Powell’s estate sued CUNA for bad faith and a jury recently awarded it $6.2 million in damages, some of that constituting punitive damages against the insurer. At the trial, her bad faith insurance attorney discovered that CUNA was treating other policyholders the same way and exposed a long history of fraudulent claims practices.

Unfortunately, Powell’s estate may not get that money right away. CUNA is appealing the verdict because it feels that the judge erred by letting the jury see evidence that 1) the company allegedly denied thousands of claims, 2) the company created spreadsheets tracking the amount of money involved in each denial and 3) court documents in which CUNA initially claimed the spreadsheets didn’t exist. In the meantime, legal experts say that the company is doing anything it can to settle claims and avoid further lawsuits.

Case Studies: Uncovering Bad Faith Insurance Practices

Case Study 1: Teri Powell’s Fight for Justice

Teri Powell, a passionate educator with over 25 years of teaching experience, was denied disability insurance benefits by CUNA Mutual Insurance Society. Despite her debilitating health conditions, the insurer ignored her requests and failed to provide the support she needed. After Teri’s untimely death, her estate took legal action against CUNA Mutual. The jury ruled in favor of Teri’s estate, awarding $6.2 million in damages and shedding light on the insurer’s fraudulent practices.

Case Study 2: Auto Body Shop vs The Hartford – Fighting for Fairness

John Anderson, the owner of an auto body shop in Connecticut, filed a lawsuit against The Hartford, one of the largest insurance companies in the United States. The Auto Body Association of Connecticut supported John’s case, accusing The Hartford of engaging in unfair trade practices. The insurer’s manipulation of labor rates and bias towards their selected appraisers compromised the fairness of the car repair process. The jury sided with the Auto Body Association, awarding $15 million in damages and highlighting the importance of holding insurance companies accountable.

Case Study 3: Sarah’s Struggle Against Unfair Treatment by Insurance Companies

Sarah Thompson, a homeowner faced with property damage, experienced the frustrating reality of bad faith insurance practices. Her insurance company repeatedly denied and delayed her claim, prioritizing their profits over fulfilling their obligations. Sarah sought the help of a bad faith insurance attorney to challenge the unfair treatment. Through legal action, she aimed to obtain the coverage she deserved and bring attention to the issue of bad faith practices.