The Washington Court of Appeals has upheld a jury's decision that awarded significant damages to Meseret Shiferaw against Nationwide Affinity Insurance Company of America. The court ruled on November 10, 2026, in case number 39643-6-III, affirming the jury's findings of bad faith and negligence by the insurance company.

This ruling is crucial for policyholders, as it emphasizes the responsibilities of insurance companies to act in good faith and handle claims properly. The case stems from a tragic accident that resulted in serious injuries and the loss of three children, leading to a complex legal battle over insurance claims.

Background

Meseret Shiferaw was involved in a severe car accident on August 16, 2017, when her vehicle collided with a semi-truck in Alberta, Canada. Shiferaw and her husband, Solomon Agere, were injured, while their three children tragically lost their lives. Shiferaw held a personal auto insurance policy with Nationwide that included coverage for such incidents.

Following the accident, Agere sought compensation from Nationwide for the damages incurred. Nationwide recognized that Shiferaw was at fault and that the claims would exceed her policy limits. However, the insurer delayed in settling the claims, leading Agere to file a lawsuit against Shiferaw and subsequently add Nationwide as a defendant.

The legal proceedings became complicated, with multiple claims and counterclaims. Shiferaw eventually accused Nationwide of bad faith, negligence, and violations of the Insurance Fair Conduct Act (IFCA) and the Consumer Protection Act (CPA). The case went to trial, where the jury found in favor of Shiferaw, awarding her significant damages.

The Ruling

The Court of Appeals ruled on several key issues. It affirmed the jury's awards for bad faith, negligence, and CPA violations but reversed the IFCA award, stating that Shiferaw did not have a valid claim under that statute. The court explained, "The purpose of IFCA is to protect insurance policy holders..." and noted that Shiferaw's claim did not meet the requirements of the law.

Judge Murphy, writing for the court, stated, "We reverse the punitive damages award and judgment..." and emphasized that Shiferaw's claims did not constitute a violation of the IFCA as she was not asserting a right to payments for first-party coverage benefits at the time of her notice. The court also reversed the attorney fee awards, instructing the lower court to reassess those amounts.

Impact

This ruling has significant implications for both insurers and policyholders. It reinforces the importance of timely and fair handling of claims by insurance companies. The court's decision to reverse the IFCA award indicates that policyholders must clearly demonstrate the basis for their claims under that statute.

The case sets a precedent for future disputes between insurers and insured individuals, particularly regarding the handling of claims and the obligations of insurers to act in good faith. It highlights the potential for substantial damages when insurers fail to meet their responsibilities.

What's Next

Nationwide may seek further legal options, including a potential appeal to the Washington Supreme Court regarding the court's interpretation of the IFCA. Shiferaw's cross-appeal concerning the denial of injunctive relief will also be reconsidered in light of the appellate ruling.