Insurance Company's Obligation Limited to Settle Case for Policy Limits

21st Century Insurance Company v. Superior Court (Tapia) - filed September 10, 2015, Fourth District, Div. Two

Where defendant insured was involved in automobile collision causing serious injuries to plaintiff, and plaintiff and defendant insured stipulated to judgment, with an agreement that plaintiff would not execute against defendant insured, and defendant insured would assign his rights against insurer to plaintiff and testify in plaintiff’s consequent litigation against insurer, defendant insured’s settlement without insurer’s consent vitiated any claim in excess of policy limits. Insurer fulfilled its duties of good faith and fair dealing by offering to settle for the limits of policy issued to defendant insured’s sister, identifying the vehicle involved in the collision as an insured vehicle and defendant insured as a "rated driver." Insurer had no duty to consider the possibility that defendant insured might have additional coverage under policies issued by insurer to other family members, since neither defendant insured nor the vehicle was listed on those policies, and the other family members did not, according to the policies, live at the same address as defendant insured. Full text http://sos.metnews.com/sos.cgi?0915//E062244