A Valencia County family recently received a jury-directed settlement of $36 million from a national insurance company after it claimed a female family member killed in a car crash was completely at fault and refusing to pay out on the $1 million policy she had purchased just days before the collision.
According to a recent press release from Albuquerque law firm, Gauthier and Maier Law Firm, the settlement ends a years-long legal battle that left a 4-year-old boy scarred both physically and emotionally, and raised significant doubts about the integrity of insurance company State Farm.
On Sept. 2, 2017, while driving on N.M. 47 in southern Valencia County, Andrea Lovato, 30, of Rio Communities, was faced with an impossible choice. With a vehicle in her lane heading straight for her at 70 mph — twice the speed limit on that part of the highway — she could veer right, off the road down a slope or into a group of signs, stay in her lane in the hopes the other driver moved out of the lane or go left into an open field. The drivers actions mirrored each other, the attorney’s press released stated, and the vehicles collided head on.
Lovato was killed in the crash, her body shielding her 4-year-old nephew from impact. He was trapped in the car until rescue personnel arrived. He sustained severe injuries, leading to emergency abdominal surgery due to internal bleeding.
Just five days before her death, Lovato had reached out to her insurance company — State Farm — to reinstate her coverage. Her car had recently been stolen and damaged, and Lovato was driving a rental vehicle while awaiting repairs. When she spoke to an insurance agent, they offered to upgrade her coverage from her previous amount of $25,000 to $1 million for only about $30 more a month.
She decided to purchase the higher coverage, not knowing it would eventually become a point of contention.
After Lovato’s death, State Farm reduced the cover back to the original $25,000 limit without the family’s knowledge or consent. However, Lovato’s mother found the $1 million declaration page from the policy that had been mailed to the family home, proving that Lovato had purchased the additional coverage.
“The family rightfully demanded that State Farm fulfill its obligation. However, State Farm refused to acknowledge its commitment,” the law firm’s press release reads. “Had Andrea Lovato’s mother not found these documents, State Farm would have gotten away with their unethical practices to save money.”
While the insurance company admitted to the existence of the $1 million policy and its issuance, it continued to deny the claims by the 4-year-old boy and Lovato’s estate, refusing to provide the coverage.
Immediately after changing the policy, State Farm claimed Lovato was fully at fault for the accident and disregarded all evidence contrary to this assertion. They maintain the policy was issued by mistake and they were authorized to change the policy after the accident.
On Oct. 31, a Santa Fe jury decided Lovato was not fully at fault for the accident and that State Farm had breached the $1 million contract, committed bad faith and violated the Unfair Trade Practices Act and Unfair Insurance Practices Act.
The jury awarded the family $12 million in damages for the auto accident and another $24 million in bad faith and breach-of-contract damages, with $20 million of that as punitive penalty damages to State Farm.
“The $36 million verdict gave the family confirmation and validation that Andrea Lovato was not 100 percent at fault for the accident as State Farm always claimed her to be, and that their conduct was cruel and malicious to the family,” the press release reads.
The Valencia County News-Bulletin is a locally owned and operated community newspaper, dedicated to serving Valencia County since 1910 through the highest journalistic and professional business standards. The VCNB is published weekly on Thursdays, including holidays both in print and online.
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April 25, 2024
