FEBRUARY 2016 BAD FAITH CASES: NO BAD FAITH WHERE INSURER MAKES PAYMENT TO PLAINTIFF’S BANK WHICH WAS LISTED AS THE NAMED INSURED IN THE POLICY (New Jersey Federal)

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In Hossain v. American Security Insurance Company, the court rejected the notion that an insurance payment to the plaintiff’s bank was made in bad faith.  Under the relationship between the insured and the bank, the insured’s policy listed the bank as the named insured, and the insured as the borrower. “The insurance policy … explains that loss payments ‘will be made payable to the named insured and the borrower as their interests appear.’” Thus, there was no violation by the insurer making payment directly to the bank.

Date of Decision:   February 8, 2016

Hossain v. Am. Sec. Ins. Co., Civil Action No. 15-8138, 2016 U.S. Dist. LEXIS 14871 (D.N.J. Feb. 8, 2016) (Simandle, J.)

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