Insurance (Bad Faith)

Sixty-five year old man applied for health insurance and reported in a telephone application that he had seasonal allergies and took over-the-counter medicine. Two years later, he had serious heart issues and incurred substantial medical bills. The medical bills triggered a recovery and receipt of prior medical records and those records disclosed that the insured had previous treatment for chronic bronchitis. The insurance company denied payment and brought an action to rescind the policy. The insured counter-claimed for bad faith and punitive damages and cited other 8-figure judgments and settlements in similar cases against the same insurer for “post claim underwriting”.