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The insurer does not have a right to gamble with its insured's money when a demand is made within the policy limits unless it elects to proceed and pay any excess. Doing it to fulfill a quota compounded it, and lying about the existence of the quota and destroying documents relating to that made it reprehensible.

As to why the customer had such a low limit policy, I can tell you that State Farm is the king of selling crap policies without recommending upping the limits. My company sends me things about this all the time, and as a result, I'm the most insured SOB on earth.

re: The insurer does not have a right to gamble with its insured's money when a demand is made within the policy limits unless it elects to proceed and pay any excess. )))

Hmm. How is this right enforced? Is is a statute (I think that's when a specific law is legislated, written down in kind of a rule book), or is it case law (I've been told this comes down through appeals), or tradition? You speak with confidence about "rights"--I don't understand what sort of right you mean.

Now, just as a citizen with only sense for my tool, it would seem very dangerous to force an insurance company to function the way you suggest we have a "right" to expect. If an insurance company cannot quarrel with a demand for payment, it will not be in business very long. I'd like to understand how this works?