Ruiz & Smart represented an elderly homeowner and her adult son in a serious insurance bad-faith case arising from a residential smoke loss in Eastern Washington. What should have been a straightforward homeowners’ claim instead became a prolonged ordeal that left our clients living for months in unsafe, uninhabitable conditions—despite having paid for comprehensive insurance coverage, including alternative living expenses (also known as ALE).
After a smoke event severely damaged their home, the insurer acknowledged coverage but failed to meaningfully investigate, communicate, or pay the benefits necessary to restore the property or allow the family to live elsewhere during repairs. Although the main living areas of the home were no longer usable, the insurer never clearly explained or offered alternative living expense benefits. As a result, an elderly homeowner who had expected to spend her later years comfortably in her home was forced to live with her son in a dark, cramped basement with limited kitchen facilities, minimal privacy, and persistent smoke odors.
Over time, the insurer’s delays compounded the harm. Repair estimates were minimized or ignored, recommendations from field personnel were not acted upon, and critical information was withheld from the insureds. Even when experts were retained, reports were delayed or concealed. Meanwhile, the home continued to deteriorate, repair costs escalated, and the emotional and physical toll on the family grew heavier with each passing month.
Ruiz & Smart filed suit, asserting claims for breach of contract, insurance bad faith, and violations of Washington’s consumer-protection and insurance-fair-conduct laws. Through discovery, the firm uncovered evidence of systemic claim-handling failures, including missed opportunities to properly evaluate habitability, failure to timely provide benefits, and internal decision-making that prioritized cost savings over the insureds’ well-being. The case also highlighted how vulnerable policyholders—particularly elderly insureds—can be disproportionately harmed when insurers do not follow Washington’s strict claims-handling rules.
As trial approached, the insurer ultimately agreed to resolve the matter through a confidential settlement. While the terms remain private, the resolution brought long-overdue accountability and allowed our clients to move forward after years of unnecessary hardship.
This case reflects Ruiz & Smart’s commitment to holding insurers accountable when they abandon their obligations and to advocating for policyholders whose voices are too often ignored—especially when delay and indifference turn an insured loss into a prolonged personal crisis.