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1. The woman has not received anything.  This victory at the Missouri Appeals Court was to affirm the arbitration amount (see #4 below) and held GEICO could not challenge the arbitration process (see #3 below).  Link to full opinion which has additional facts about the occurrence itself, full of the sordid details.
2. Typically, in cases where an insurance company refuses to defend their insured (the boyfriend) because they do not believe their policy covers this type of claim, the person in the boyfriend’s shoes is free to make an agreement with the injured party (the woman in this case) to limit his exposure.  GEICO told their insured there is no coverage against this type of claim under his auto policy and filed a lawsuit (which we will refer to as Lawsuit #1) asking a court to say there is no coverage. Lawsuit #1 is still pending and it may be determined, while there is a damages award, GEICO is not responsible for it.  The attorneys for the woman argued there is coverage because the GEICO policy is vague and an ambiguity in an insurance policy is construed against whoever wrote it (GEICO in this case).  It will be interesting to see what the court decides on Lawsuit #1.
3. Once GEICO refuses to provide coverage, the two parties (the woman and the boyfriend) agree to have an arbitrator decide the case on damages (the amount owed to the woman for her injuries, pain and suffering, etc.).  The important point here is that GEICO was invited to participate in the arbitration but DECLINED because they maintained their non-coverage decision.  GEICO made a mistake because they should have participated and attempted to reduce the arbitration award, especially if there is a chance Lawsuit #1 may succeed.  GEICO, however, chose to go all-in on their denial of coverage.
4. During the arbitration, the arbitrator listened to the evidence (similar to a jury) from both sides and determined the woman’s damages were $5.2 million based on all the facts submitted.  (see page 3-4 of the opinion for some more facts about the incident itself).
5. GEICO filed Lawsuit #2, this time challenging the validity of the arbitration award and the Missouri appeals court ruled against GEICO.  The Court held GEICO had the opportunity to participate in the arbitration and chose not to intervene and now cannot fight the damages award amount.  The court’s decision is in line with Missouri court precedent. HOWEVER, of note is that GEICO’s first lawsuit (referenced in paragraph #2 above, Lawsuit #1) asking the court to determine there is no coverage is still on-going.  Just because there is a damages award against the boyfriend does not mean GEICO is on the hook to pay it.
6. If GEICO loses Lawsuit #1, then the woman will be able to file an equitable garnishment action against GEICO for her judgment.  GEICO will then either pay out (or make a settlement agreement) or the boyfriend will pursue a bad faith failure to settle claim against GEICO, meaning GEICO should have protected their insured (the boyfriend) but chose not to, at the expense of the boyfriend.  This is an important protection for consumers because insurance companies are supposed to take the interest of their insured ABOVE that of their own financial interests.  As you probably know, however, insurance companies routinely make decisions which benefit themselves financially (ultimately, they are a business and they have a duty to their stockholders to maximize earnings).  This conflict of interest is what good lawyers use to show the insurance company acted unreasonably.

While this explanation was much more complex, I hope it explained the exciting world of insurance coverage litigation.  The good news for my readers is I love this and have multiple cases currently in litigation fighting insurance coverage disputes against insurance companies.  While the facts of my cases are not as sexy (pardon the pun), they all involve scenarios where an insurance company should have paid my client/their insured a fair settlement and refused to do so.  The only way to hold an insurance company accountable is to pursue litigation.  If you or someone you know needs help fighting an insurance company, please reach out to our office.

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