How has an insurer been held liable in a motor vehicle accident where the insurer settled for policy limits in good faith on behalf of the owner?

[44 Cal.App.4th 1647] Smoral v. Hanover Insurance Company (1971) 37 A.D.2d 23, 322 N.Y.S.2d 12 reflects the same view. There once again, the insurer settled for policy limits on behalf of the owner, leaving the driver without coverage (except from his own carrier). The appellate court held the insurer liable, because "it was [the driver's] insurer and it owed a duty of good faith to him [citations]. Good faith in this connection means more than an absence of intent to harm. It means an adequate protection of the interests of the assured. [Citation.] While this duty has most frequently been considered where the interests of the company have been preferred to the detriment of the insured [citation], the same considerations would apply with equal force where the company preferred one of its insureds over another. It is absolutely no answer for the company to say that it paid the full amount of its policy if in so doing it fully protected one of its insureds and left the other completely exposed." (Id. at p. 25, 322 N.Y.S.2d at p. 14.) The court opined that the driver would be entitled to recover the proportion of the policy limits that in good faith should have been allotted to relieving or reducing his liability. (Id. at p. 26, 322 N.Y.S.2d at p. 14.) ⁵