Section 3.61 Vexatious Refusal to Pay

• Library: Insurance Practice 2015

Like most states, Missouri has a so-called vexatious delay or vexatious refusal to pay statute, § 375.420, RSMo 2000. This statute presently provides that, in an action against an insurance company to recover under almost any kind of insurance policy except automobile liability insurance, if it appears that the company has refused to pay the loss “without reasonable cause or excuse,” the court or jury may allow the plaintiff damages not to exceed 20% of the first $1,500 of loss and 10% of the balance of the loss, as well as a reasonable attorney fee. These damages would be in addition to the amount of the loss, plus interest. This statute was most recently amended in 1975 to change the amount of damages from “not to exceed ten percent on the amount of the loss” to the present language concerning damages. The statute, with few changes in substance, has been on the statute books since 1865.

The constitutionality of the law has long been established. Barber v. Hartford Life Ins. Co., 187 S.W. 867 (Mo. 1916), rev’d on other grounds, 245 U.S. 146 (1917). Missouri courts have...