The Missouri vexatious refusal to pay statute is a consumer protection law that is designed to prohibit abusive insurance practices. The law applies to what are known as first-party insurance contracts. That is to say, the law only covers claims made against your own insurance. The vexatious refusal to pay statute does not apply to claims made against someone else’s insurance (i.e., third-party insurance claims). Abusive practices involving third-party insurance must be redressed through a common law bad faith claim.
The Missouri vexatious refusal to pay statute protects policy holders from an unreasonable denial of a claim or an unreasonable refusal to pay the full value of a claim. The vexatious refusal to pay statute applies to the following types of insurance policies, among others:
Though Missouri law is clear that insurance companies are not permitted to unreasonably deny claims, insurance companies routinely violate the law. Below is a list of just some of the situations that may trigger a vexatious refusal to pay lawsuit:
The Missouri vexatious refusal to pay statute permits consumers to file suit to recover (1) the reasonable value of their claim, and (2) a penalty in the amount of 20% of the first $1,500 of the value of the claim and 10% of the value of the claim over $1,500. Additionally, the law permits policy holders to recover the attorney fees they incurred in pursuing a lawsuit. The attorneys of Lear Werts LLP are experienced in insurance law cases and offer free consultations to individuals who believe that they may have been subjected to an unreasonable denial of an insurance claim.