11th Circuit Rules GEICO Did Not Act In Bad Faith In Handling Auto Accident Claim

• Published date: 21 October 2025
• Subject Matter: Insurance, Insurance Laws and Products
• Law Firm: Cozen O'Connor
• Author: Juan Garrido

In the recent decision of Martinez v. GEICO Casualty Insurance Company, 2025 WL 2699231 (11th Cir. Sept. 23, 2025), the U.S. Court of Appeals for the Eleventh Circuit affirmed the district court's order granting summary judgment for GEICO Casualty Insurance Company ("GEICO) and held that under the totality of the circumstances test, it did not act in bad faith in its handling of an auto accident claim with multiple claimants.

Background and Facts:

On February 12, 2009, Katherine Martinez ("Martinez") was one of five passengers in an SUV involved in a three vehicle accident. Martinez and another passenger, Stephanie Mejia ("Mejia"), were both severely injured and airlifted to the hospital. Diana Guevara ("Guevara") was driving the truck that struck the SUV. Guevara, who was insured under an auto policy issued by GEICO, reported the accident on February 18, 2009. The Policy provided bodily injury coverage up to $10,000 per person, but no more than $20,000 total per accident. Upon notice of the claim, Greg Santini, a GEICO claims manager, identified a coverage issue as the truck that Guevara was driving was not listed on the Policy.

On February 20, 2009, GEICO began trying to obtain the police report from the crash to learn the identities of the SUV passengers and the details of the incident. GEICO received the police report on March 5, 2009. Despite the existence of coverage issues, on March 22, 2009, thirty-two days after receiving notice of the claim'GEICO informed the SUV passengers that it had tendered the full $20,000 to resolve all claims at a global settlement conference, which was taking place on April 30, 2025.

At the conference, GEICO determined that the $20,000 aggregate-coverage limit would be split evenly between Mejia and Martinez, with each receiving the individual coverage limit. Mejia accepted the tender, but Martinez rejected the offer on September 23, 2009, and filed suit in state court against Guevara. After nine years of litigation in state court, Guevara and Martinez reached a stipulated final judgment for $2 million. Guevara assigned her rights under the Policy to Martinez, who in turn sued GEICO in federal court alleging one count of bad faith. The district court granted GEICO's motion for summary judgment and Martinez appealed.

Florida Bad Faith Law:

Florida law "imposes a fiduciary obligation on an insurer to protect its insured from a judgment that exceeds the limits of the insured's policy." Harvey v. GEICO Gen. Ins. Co., 259...