Insurance: Paying for Outrage

To guard against unfair treatment of insurance claimants, an "outrage" law has evolved out of cases that have come up in California courts. Under it, an insurance company may be sued for additional damages when emotional distress is suffered by persons whose legitimate claims are sidetracked or turned down for "false or frivolous" reasons. Insurance companies naturally do not like the law, and now their worst fears have been confirmed. Last week a jury in Orange County awarded an outraged policyholder $710,000 in damages. It was by far the largest sum ever...

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