The Biggest Insurance Bad Faith Lawsuit Payouts of 2025

Colorado: $145M Verdict in Brain Injury Bad Faith Case Against NorGUARD

Represented by: Claggett & Sykes Trial Lawyers

In a landmark insurance bad faith case, a Colorado jury awarded $145.26 million to Fermin Salguero-Quijada, a construction worker who suffered a traumatic brain injury after falling from a ladder in 2021. Although Norguard Insurance initially covered his emergency care, the insurer later denied his transfer to a specialized inpatient rehabilitation facility, allegedly critical for his recovery. As a result, Salguero-Quijada’s condition deteriorated significantly, with his legal team asserting that this denial caused permanent neurological damage. Instead of receiving continued medical care, he was placed on a commercial flight and sent home, where his family, lacking proper resources, had to manage his complex medical needs.

At trial, the plaintiff’s attorneys argued that Norguard’s refusal to fund rehabilitation care was motivated by cost-saving strategies, not medical judgment. The insurer countered that the decision aligned with the treating physician’s guidance and emphasized its prior payments totaling $2.1 million. Ultimately, the jury sided with Salguero-Quijada, awarding $60 million in punitive damages. The verdict closely mirrored pretrial litigation models run by plaintiff’s counsel Sean Claggett, who relied on real-time analytics to assess jury sentiment. A pivotal moment in the trial was expert testimony from neurologist Dr. Allison Gray, who explained the irreversible consequences of delayed rehabilitation for brain injury patients, reinforcing the causation argument central to the plaintiff’s claim.

Nevada: $114M Verdict in Bad Faith Case Against USAA Over TBI Claim

Represented by: Bighorn Law

In a decisive rebuke of insurance bad faith practices, a Nevada jury awarded Timothy Kuhn $114 million—$100 million in punitive and $14 million in compensatory damages—after finding that USAA improperly denied and delayed his claim following a 2018 rear-end collision. Kuhn was struck by a Ford F-150 while driving his BMW sedan on a Nevada highway. Though USAA initially accepted that Kuhn was not at fault, the insurer reversed its position during litigation, unexpectedly arguing that Kuhn bore partial responsibility for the crash. The jury found that this reversal, coupled with USAA’s refusal to promptly settle, constituted a breach of its duty to its insured.

Represented by Kimball Jones of Bighorn Law, Kuhn alleged that USAA engaged in a “delay, deny, defend” strategy—a well-known industry tactic for minimizing payouts. Despite experiencing long-term cognitive and sensory impairments consistent with a traumatic brain injury, Kuhn received only a $10,000 initial settlement offer. USAA did not agree to pay the full $250,000 policy limit until just before trial. Jones criticized USAA’s conduct, stating, “USAA knew whose fault it was while they were blaming Tim.” The substantial punitive award signals the jury’s disapproval of the insurer’s handling of the claim and underscores the legal risk insurers face when policyholder interests are subordinated to litigation strategy.

Texas: $40M Verdict in Bad Faith Case Over Church Storm Damage

Represented by: Raizner Slania

In a significant verdict underscoring the responsibilities of insurers toward their policyholders, a Texas jury awarded Green Acres Baptist Church nearly $40 million in a bad faith insurance dispute against Brotherhood Mutual Insurance Company. The litigation stemmed from Brotherhood Mutual’s failure to pay for storm damage following a severe wind and hailstorm in April 2020. After a four-day trial, the jury found that the insurer had breached its contract and its duty of good faith and fair dealing by withholding more than $4.8 million in policy benefits for nearly four years.

The church, represented by attorneys Andrew Slania, Todd Wells, and local counsel Jamy Skaggs, demonstrated that Brotherhood Mutual failed to handle the claim in accordance with established legal standards. In addition to compensatory damages, the jury imposed $35 million in punitive damages—a clear signal of the seriousness with which it viewed the insurer’s conduct. The verdict serves as a powerful reminder that insurance companies are legally bound to act in good faith when handling claims and may face substantial consequences when they fail to do so.

Hawaii: $3.1M Verdict in Bad Faith Case Against Farmers Insurance

Represented by: Alapa & Otake, Davis Levin Livingston

After a protracted legal battle spanning more than a decade, a Honolulu jury awarded retired public school teacher Randall Sugimoto $3.1 million in a bad faith insurance claim against Farmers Insurance Hawaii. The dispute arose from a 2012 head-on collision, after which Sugimoto sought to collect $300,000 in underinsured motorist benefits coverage he had dutifully paid premiums on for 24 years without ever filing a claim. Instead of honoring the policy, Farmers allegedly mishandled, delayed, and unfairly evaluated his claim, prompting allegations of insurance bad faith.

Sugimoto was represented by attorneys Thomas Otake of Alapa & Otake and Chase Livingston of Davis Levin Livingston. The jury found that Farmers violated its duty of good faith and fair dealing, awarding $300,000 in compensatory damages and an additional $2.8 million in punitive damages. The trial marked the second time the case was heard, with an earlier verdict also favoring Sugimoto but overturned for legal reasons. Attorney Otake emphasized the jury’s message that unfair treatment by insurers will not be tolerated: “They should be punished in the hopes they will avoid similar conduct in the future.” The verdict stands as a stark warning to insurers across Hawaii regarding their obligations to policyholders.

Conclusion

The 2025 verdicts underscore a growing judicial intolerance for insurance bad faith. As juries award increasingly significant damages, the message is clear: insurers that delay, deny, or mishandle claims risk severe legal and financial consequences. These outcomes reinforce the critical duty insurers owe to policyholders—and the high cost of failing to uphold it.