Court Rules Insurance Company Erred in Washington Bad Faith Case

A story out of Washington State last week offers a good example of possible bad faith insurance practices.

Four years ago, Evelyn Bushnell was admitted to a nursing home in Kirkland, Washington after suffering a stroke.  Despite having a nursing home policy since 1986 from Medico Insurance Company, she was denied coverage. The company defended its decision by citing a policy technicality that required her to be in a hospital three days before admission to the nursing home.

Washington banned such requirements in 1987.

As reported by the Seattle Post-Intelligencer, the state Court of Appeals affirmed the company’s mistake in a ruling last week.

In 2009, A King County Superior Court judge sided with the insurer and dismissed the original lawsuit.  It was filed on behalf of Evelyn Bushnell by her son, Leroy, after Evelyn passed away.  While the appeals court ruled that the insurance company did err in denying coverage, it remanded the issue of bad faith to a lower court.