Plus, in many states (I don't know about FL specifically) if a plaintiff's lawyer makes a demand and the insurer does not settle, and the verdict comes in for more than the demand, the insurer is on the hook for the entire amount plus attorney fees and costs.
So yeah, it's a good business decision.
Not so much, The weaselly insurance company actually tried to weasel out of paying anything
http://blogs.findlaw.com/injured/2012/08/trayvon-martins-mom-sued-by-travelers-insurance-co.htmlThat will be one million, thank you. \=Fulton made an insurance claim against Traveler's for about $75,000, reports The Washington Post. The insurance company had a policy with the homeowners' association at the Retreat at Twin Lakes in Sanford, Fla., where Trayvon Martin was killed, agreeing to cover the costs of certain injuries.
But instead of paying out Fulton's claim, Traveler's filed a lawsuit against Fulton so that a court would step in and clarify just what damages it owes, if any
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By filing the lawsuit against Sybrina Fulton, Traveler's is seeking a declaratory judgment from a judge. Generally, a declaratory judgment differs from other judicial rulings in that it does not require that any action be taken. Instead, the judge simply issues an opinion declaring the rights of each of the parties involved after analyzing the controversy. It should be noted, however, that a declaratory judgment is conclusive and legally binding. Traveler's Insurance Company basically sued Trayvon Martin's mom first, before she had a chance bring a lawsuit against the company. The judge's declaratory judgment will determine just what rights Sybrina Fulton has to recover damages from the insurance company.
Maybe they don't have dec. actions in your neck of the woods. But if there is a coverage dispute -- not typically an issue of liability, but of policy terms or of rival claimants for the policy benefits, the statutorily prescribed action for the insurance company is to file a dec. action.
Looks like this is a "rival claimants" situation - iirc, Trayvon's parents have been divorced for some time, and it appears that the father (at least at the time) had custody. So there is probably a legal issue of whether the mother had the right to seek damages for wrongful death for a child of whom she was not the custodian. Don't know FL law, but in GA this would be an issue if the insurer paid the mom and the dad turned out to be the proper party to file the claim (or they were required to file the claim jointly). If the insurer does NOT file a dec. action and pays the wrong party, they have to pay all over again. Now there's a bad business decision for you!
From R4F's post, I see that the "weasel" was the mom, who filed a claim for an insurer outside that insurer's policy period.
You can't get insurance coverage for an incident outside the policy period. That's not what the insurer contracted for.