DECEMBER 2018 BAD FAITH CASES: NO BAD FAITH WHERE CARRIER’S SETTLEMENT OFFERS ARE BASED ON THIRD PARTY EVALUATION, AND ANY DELAYS WERE CREATED BY INSURED (New Jersey Appellate Division)

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This first party bad faith case centered on damage to plaintiff’s automobile. The insured claimed the carrier knowingly failed to tender the true value of plaintiff’s property damage. The lower court granted the insurer summary judgment on bad faith, and the insured appealed.

The appellate court found no bad faith. The insurer “made multiple offers to settle the claim that were all based upon third-party evaluations” of a vehicle with 269,000 miles on it. Moreover, it was the insured who “initially delayed the processing of the claim by insisting he would obtain an amended police report showing he was not at fault in the accident,” but “after the passage of several weeks, he relented.” Further, after finally supplying requested information to the insurer, the third party evaluator did substantially increase the settlement offer.

Under these circumstances, “no reasonable factfinder could conclude that defendant acted with knowledge or reckless disregard of the lack of a reasonable basis for denying the claim or with reckless . . . indifference to facts or to proofs submitted by the insured.”

Date of Decision: December 3, 2018

Ferro v. Travelers Insurance Co., Superior Court of New Jersey DOCKET NO. A-5174-16T3, 2018 N.J. Super. Unpub. LEXIS 2642, 2018 WL 6272940 (New Jersey Appellate Division Dec. 3, 2018)

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