- Amount
- $818,000 (full death benefit paid to our client, with a premium refund and interest)
- Counsel
- Interpleader Law
- Result for
- The policy owner and primary beneficiary, our client
- Case
- Billard v. State Farm Life Insurance Co.
- Court
- U.S. District Court, District of Nevada
- Docket
- No. 2:18-cv-00182-APG-PAL
- Decided
- October 18, 2018
- Issue
- Whether an insurer can keep investigating a claim on an incontestable policy instead of paying it or filing an interpleader
Our client owned an $800,000 State Farm life insurance policy and was its primary beneficiary. The insured died of a heart attack while traveling in Mexico in September 2017, and our client filed his claim the next month. State Farm kept asking for more records from Mexico. It later questioned whether our client had an insurable interest in the insured’s life, although it had reviewed that question before it issued the policy.
We sued State Farm in federal court in Nevada in February 2018 for breach of contract and unfair claim practices. In September 2018 we moved for summary judgment. The motion argued that the policy was past its two-year contestable period and every premium had been paid, so State Farm owed the benefit. It also argued that under Nevada law only the insured’s estate could pursue a lack of insurable interest, and that State Farm had not brought the estate into the case by the court’s deadline. In October 2018, before the court ruled, State Farm paid our client $818,309.58: the full benefit plus a premium refund and interest from the date of death. The case was then dismissed by agreement.
What it shows. An insurer cannot hold an incontestable policy’s benefit indefinitely. If there is no real competing claim, a summary judgment motion can force it to pay.
Read the court's order
- Our motion for summary judgment (Sept. 21, 2018) (PDF)
- Order dismissing the case after State Farm paid (Oct. 18, 2018) (PDF)
Past results do not guarantee a similar outcome. This summary describes the court's ruling; it is not legal advice about any other case.