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A Landmark $36 Million “Bad Faith” Verdict Against Auto Insurance Company

According to the original report by the Albuquerque Journal, A Santa Fe jury has awarded a Valencia County family a staggering $36 million in damages following a lawsuit against State Farm Insurance. The lawsuit was prompted by a fatal head-on collision that occurred in 2017, taking the life of a young woman, Andrea Lovato, and seriously injuring her 4-year-old nephew.

Just five days before the collision, Andrea Lovato had contacted a State Farm agent and upgraded her insurance coverage from a modest $25,000 to a substantial $1 million. However, following Lovato’s tragic death, State Farm argued that her policy limit remained at $25,000 and claimed that Lovato was entirely at fault for the collision.

The turning point in the case occurred when Lovato’s mother discovered the declaration page confirming the upgraded $1 million insurance policy that had been sent to Lovato’s home. The jury’s verdict specified that State Farm’s contract indeed provided $1 million in coverage, not the $25,000 coverage asserted by the company. Additionally, jurors determined that both drivers shared equal responsibility, each being 50% responsible for the collision.

Their verdict awarded the family $12 million in damages and an additional $24 million in bad faith and breach-of-contract damages. A significant portion of this award, $20 million, is designated as punitive damages against State Farm Automobile Insurance.

This landmark $36 million verdict represents one of the largest “bad faith” awards against an insurance company by a New Mexico jury. According to Shane Maier, an attorney for Lovato’s family, it is the second-highest bad faith verdict in the state’s history.

In conclusion, this case exemplifies the importance of ensuring justice in cases of catastrophic injury and wrongful death, where insurance companies may attempt to avoid their responsibilities. The substantial verdict delivered by the jury sends a powerful message that such actions will not go unpunished and that victims and their families deserve fair compensation. As of now, State Farm’s response to the verdict remains pending.

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