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A federal district court in Illinois has ordered Liberty Mutual Fire Insurance Company to pay a $4.5 million judgment, plus interest, notwithstanding its policy's $25,000 limits — and despite the fact that it did not find that the insurer had acted in bad faith in declining to defend a 16 year old in a negligence action.

Related: Allstate loses bid to overturn $14M insurance bad faith verdict

Crash leads to severe brain injury

On the night of August 2, 2013, Michiah Risby drove a 2004 Pontiac Grand Prix insured by her mother, Kimberly Perkins, through Liberty Mutual, to a party in Peoria, Illinois. Her friend wanted to leave, but Ms. Risby did not. Somehow, Miquasha Smith obtained the keys to the car and dropped off the friend, with another person in the car. Ms. Risby maintained that she had not given Ms. Smith permission, but Ms. Smith said that she had permission to drive the car.