Maine does not allow insurance bad faith claims which allow the full measure of damages caused by an insurer’s bad faith.  However, Maine does have a statute which provides for attorney fees and higher than normal interest rates (18%) in certain circumstances.  In a recent case decided by the Maine Superior Court by Justice Robert Clifford, the court gave a reading of the statute that was favorable to the insurance customer.

Maine’s statute, 24-A M.R.S. § 2436-A [],

specifically at subsection (1)(E), provides that an insured is entitled to an award of court costs, attorney fees and interest if it is determined that the insurer unreasonably denied the claim.  This applies to so-called first party claims, claims where a person is dealing with their own insurer.

In the recent decision by a Superior Court case pending in the Oxford County Superior Court, Winsor v. Green Mountain Ins. Co., the court rejected the insurer’s effort to substantially limit the application of the rule by arguing the court should adopt a “genuine dispute” test.  The test, as promoted by Green Mountain, would be that if there is a genuine dispute about the facts of the cases, then the insurer cannot be held liable for unreasonably denying the claim.

The court specifically rejected that approach and determined that it was for a jury to decide whether the insurer in this case acted reasonably when it denied the claim.  The court refused to adopt any other standard other than the reasonableness of the insurer’s conduct, and refused to impose any special burden of proof.


Stephen B. Wade