JANUARY 2016 BAD FAITH CASES: INSURED’S CLAIM FOR BAD FAITH DISMISSED WHEN COURT FINDS NO COVERAGE (Pennsylvania Superior Court) (Not Precedential)

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In Rogers v. Allstate Property and Casualty Insurance Company, the Superior Court of Pennsylvania affirmed the dismissal of bad faith claims asserted against Allstate, after finding that the insured’s auto insurance comprehensive clause did not cover negligent or poor workmanship repairs by a third-party repair shop.

The insured was involved in a collision, and permitted an unsolicited tow truck to transport her car to Collisionworks for repairs. An Allstate adjuster prepared an estimate of repairs, and Collisionworks agreed to complete the repairs for the cost proposed in the adjuster’s estimate. Because Collisionworks and Allstate were not partners, Allstate tendered the amount of the estimate directly to the insured, who in turn paid the money to Collisionworks.

After the insured noticed issues with her car, she filed a claim with Allstate for the car’s condition, which was ultimately denied by Allstate. Allstate explained that although it does not required insureds to use an “Allstate priority repair option,” Allstate does not provide comprehensive coverage to for loss caused by negligent repairs.

After the denial, the insured brought suit against Allstate and Collisionworks. The trial court sustained Allstate’s preliminary objections, and dismissed the insured’s claims of breach of contract, negligence, violation of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (“UTPCPL”), and bad faith with prejudice.

On appeal, the Court stated that the insured’s issues hinge upon the question of coverage. In its analysis, the Court stated that because the policy does not mention or explicitly exclude negligent or faulty workmanship, the “Scope of Coverage” clause must be reviewed in light of the entire policy to determine if there is ambiguity that should be construed in favor of coverage.

After reviewing the policy, the Court concluded that only certain categories of harm were subject to coverage, including: 1) weather-related risks, 2) Civil unrest risks, 3) Criminal Acts, and 4) falling objects. The Court stated that the insured’s claim, as pled, can only be characterized as faulty or negligent workmanship, and not a criminal act.

Ultimately the Court agreed with the trial court and found that there was no coverage in this case, and Allstate did not act in bad faith, negligently, fraudulently, or in derogation of the UTPCPL.

Date of Decision: December 22, 2015

Rogers v. Allstate Prop. & Cas. Ins. Co., No. 161 EDA 2015, 2015 Pa. Super. Unpub. LEXIS 4644 (Pa. Super. December 22, 2015) (Wecht. J.)

 

 

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