Wood v. New Jersey Manufacturers Insurance

Rova Farms Resort, Inc. v. Investors Insurance Co. of America, 65 N.J. 474, 323 A.2d 495 (1974), recognized a cause of action against an insurer in those instances where certain circumstances coalesce: where there is a settlement demand within the policy limits, the insurer in bad faith refuses to settle the claim, and the verdict above the policy limits is returned. In that defined setting, the carrier’s bad faith failure to settle the claim within the policy limits may render the carrier liable for the entire judgment, including the excess above the policy limits. See Fireman’s Fund Ins.…