Zurich faces bad faith suit after alleged silence on dealer's claim

A Louisiana dealership says Zurich American Insurance Company spent months demanding documents - then stopped responding - on an identity-fraud claim worth over $108,000.

CBG GMC, Inc., a GMC dealership in DeRidder, Louisiana, filed suit against Zurich in the US District Court for the Western District of Louisiana on March 9, 2026. The dealership alleges Zurich refused to honor a covered loss under the "Extended Theft" provision of its Floor Plan Policy - and ultimately went quiet.

The incident traces back to April 4, 2024, when an unknown man walked into CBG's lot claiming to be "Jorman Bejan," presenting a driver's license and Social Security number to purchase a 2024 GMC Sierra Pickup Truck. Financing was approved through GMC Financial, and the man forged Bejan's signature on sales documents and a retail installment contract worth $102,457. The dealership turned over the vehicle.

Two months later, CBG learned the first payment had never been made. An investigation revealed the real Jorman Bejan is a female mathematics professor at Del Mar College in Corpus Christi, Texas — not the man who showed up at the dealership.

CBG's Floor Plan Policy through Zurich covered "Extended Theft," defined in the policy as "the voluntary parting with evidence of title or possession of a covered auto when induced by any document related to the purchase on which the name, Social Security number or a signature of the purchaser is false or forged." The policy carried a $150,000 limit for that coverage at CBG's location.

According to court filings, CBG reported the loss, but Zurich denied the claim, stating the incident needed to be reported to law enforcement "as a theft." CBG contends no such requirement exists in the policy.

What followed was a months-long cycle of documentation requests. When CBG sought to reopen the claim in February 2025 - providing transaction details and a letter from GM Financial confirming the situation as identity theft - Zurich requested a police report. Then an "unauthorized use of an automobile" report, which CBG says the policy also does not require. Zurich called the local police report insufficient and demanded one from Corpus Christi. CBG provided each document, often the same day. Zurich deemed the Corpus Christi report insufficient as well.

By January 2026, CBG's counsel notified Zurich that a criminal investigation had been opened. Zurich asked for the police report once more. CBG provided it. According to the filing, there has been no response from Zurich since January 14, 2026.

GM Financial has demanded $108,749.69 from CBG - the full balance owed under the installment agreement. CBG is now seeking that amount from Zurich, along with penalties under Louisiana's bad faith insurance laws, attorney's fees, and litigation costs.

No ruling has been made on the case, and Zurich has not yet filed a response.

For insurers and claims professionals handling dealer floor plan policies, the case is worth watching - it highlights how repeated documentation demands, particularly those an insured argues fall outside actual policy requirements, can land an insurer in bad faith litigation.