Coercive Letter Regarding Approval of Acceptance of Tortfeasor's Policy Limits

Ajax Insurance Company

Address

City, State, Zip

Dear Ajax Insurance Company,

I am enclosing an Affidavit from Tom Tortfeasor regarding his financial assets. As you can see, he rents his home and has no significant assets with the exception of his car, which is the subject of a lien.

Since Mr. Tortfeasor's failure to yield and driver inattention are not bases for punitive damages, it is apparent that such individual could bankrupt any judgment in excess of policy limits. You are welcome to further investigate the assets of Tom Tortfeasor. However, in fairness to my client, who is your insured, I request that you complete your investigation within forty-five (45) days.

As my client's insurance carrier, you have a duty to exercise good faith in deciding whether to approve the acceptance of the policy limits. Your failure to perform such duty or the performance of such duty in an arbitrary and unreasonable manner will result in a bad faith claim for compensatory and punitive damages. See United States Fire Ins. Co. v. Royal Ins. Co., 759 F.2d 306 (3rd Cir. 1985); and Utica...