New Hampshire

N.H. Rev. Stat. Ann. § 417:4, XV(a):

Under N.H. Rev. Stat. Ann. § 417:4,XV(a), “[a]ny of the following acts by an insurer, if committed without just cause and not merely inadvertently or accidentally, shall constitute unfair claim settlement practices: . . . (4) [n]ot attempting in good faith to effectuate prompt, fair and equitable settlements or compromises of claims in which liability has become reasonably clear; (5) [c]ompelling claimants to institute litigation to recover amounts due under insurance policies by offering substantially less than the amounts ultimately recovered in actions brought by them; . . . (14) [k]knowingly underestimating the value of any claim by an insurer or by an adjuster representing the insurer.”

Insurers have a duty to use reasonable care in the settlement of third-party liability actions.[1] New Hampshire had adopted a negligence standard to determine liability of an insurer failing to settle a third-party claim within policy limits.[2] The negligence standard is defined as how a reasonable man might act under the sand circumstances.[3] In applying the standard, it is recognized that “when one knows or has reason to anticipate that the person, property, or rights of another are so situated . .. that they may be injured through his conduct, it becomes his duty so to govern his action as not negligently to injure the person, property or right of that other.”[4] It follows from this standard that the insurer must recognize the conflict of interest inherent in the insurance contract and “perform the duty arising from the particular facts presented.”[5] The determination of negligence is made by “a slow motion rerun of [the insurer’s]actions leading up to the verdict.”[6]

---

[1] Dumas v. State Mut. Auto Ins. Co., 111 N.H. 43 (1971). [Dumas III]

[2] Id.at 46-47.

[3] Dumas v. Hartford Accident & Indem. Co., 94 N.H. 484, 487 (1947). [DumasII]

[4] Id.at 488.

[5] DumasIII, 111 N.H. at 48.

[6] Id.(Emphasis added).

‍