Jury awards $11.3 million in Farmers Insurance bad faith case

A Douglas County jury awarded an Omaha mother of 10 $11.3 million after finding Farmers Insurance acted in bad faith by denying a life insurance claim tied to her husband’s death in 2020. The verdict ends years of litigation and a second jury trial in a case that first produced a $350,000 contract award in March 2026.

Why it matters: - The verdict adds $11.3 million in damages on top of the $350,000 policy benefit a jury already awarded in March 2026. - The case shows how a bad faith finding can turn an insurance dispute into a far larger damages award tied to the harm caused by the denial. - The decision also highlights the leverage a jury can bring against a large insurer in a protracted family case.

What happened: - A Douglas County jury awarded an Omaha mother of 10 $11.3 million on Oct. 16, 2026, after finding Farmers Insurance acted in bad faith. - Pesek Law attorneys Ross Pesek and Alejandra Ayotitla represented the woman at trial in case CI 22-2057. - The case involved Farmers' denial of a life insurance claim after the death of the woman's husband in May 2020. - The dispute followed years of litigation and two jury trials.

The details: - The couple raised a blended family of 10 children and operated a family business in Omaha. - In 2018, the husband replaced existing coverage with a $350,000 Farmers life insurance policy. - The policy was intended to replace his income if he died. - Premiums were about $800 a month. - The couple welcomed their youngest child in May 2020. - The husband was hospitalized with COVID-19 later that month and died on May 31, 2020. - Farmers denied the claim in September 2020, citing answers on the insurance application about the husband's medical history. - Farmers offered to return about $17,000 in premiums instead of paying the $350,000 benefit. - Pesek Law presented text messages showing the insurance agent was notified of a hospitalization involving the husband's heart. - Pesek Law also pointed to disclosures in a later medical questionnaire. - The attorneys argued the agent entered incorrect answers on the application and that Farmers ignored information that should have triggered more review before coverage was issued. - Farmers maintained its investigation gave it a reasonable basis to deny the claim. - In March 2026, a Douglas County jury found Farmers breached the insurance contract, rejected the fraudulent misrepresentation defense and awarded the $350,000 policy benefit. - The October trial addressed whether Farmers acted in bad faith and what additional harm the denial caused. - Trial evidence described financial strain, borrowing from family, business obligations and repossession of the husband's truck. - The woman's mother moved into the home to help care for the children. - Her son delayed plans to take on major responsibilities in the family business. - Farmers disputed the amount and cause of the damages.

Between the lines: - The case separated contract damages from bad faith damages, which is why the jury first decided coverage and later considered the broader harm. - The size of the award suggests jurors accepted that the denial created consequences beyond the unpaid policy proceeds. - Pesek framed the case as a test of accountability for an individual against a large insurer. - The attorney told jurors, “A promise to protect should not be broken.” - He also said, “It's not based on the contract. It's based on the harm.”

What's next: - The Oct. 16 verdict closes the second jury trial in the case. - Any post-trial motions or appeal would now shift the dispute out of the courtroom and into the next phase of litigation. - The outcome may serve as a reference point for future insurance bad faith claims involving denied life insurance benefits.

The bottom line: - A jury found Farmers Insurance did more than deny a claim: it caused harm worth $11.3 million beyond the policy payout.