OCTOBER 2013 BAD FAITH CASES: INVESTIGATIONS BY THE CARRIER THAT MAY HAVE LEAD TO DIFFERENT RESULTS HAD CERTAIN EVENTS OCCURRED WHICH DID NOT IN FACT OCCUR WAS NOT THE BASIS FOR A BAD FAITH UI, CLAIM (Western District)

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In Deibler v. Nationwide Mutual Insurance Company, the insured brought a statutory bad faith claim against his UIM insurer.  The non-insured motorist had asserted the insured was at fault.  The carrier investigated that claim by reviewing the police record and attempted to speak with the plaintiff, but was not successful; though the plaintiff’s reasons for not doing so may have been justified.  Based on the policy reports, the investigator concluded that the insured was totally at fault, rather than the other driver (who was uninsured for the vehicle in use at the time).

The insured later raised a UIM claim which was investigated by a different person who reviewed the police report and an interview with the other driver, and he concluded the insured was more than 51% at fault.  He later obtained examinations under oath for both the insured and the other driver, and determined there to be an issue of fact regarding fault and proposed binding arbitration. Prior to arbitration, the carrier re-evaluated the claims and tendered the policy limits ($50,000) to plaintiff.

That the first investigator, of the other driver’s claim, did not obtain plaintiff’s statement during the course of her investigation, and did not inform plaintiff of his right to file an UIM claim did not amount to bad faith.  That the UIM investigator made an initial decision to deny benefits based on information contained in plaintiff’s file (a file that did not, at the time, contain plaintiff’s statement), likewise did not amount to bad faith.   Delays based on the need to obtain further information or even negligence do not constitute bad faith; rather, the delay must be a time when the carrier knew or recklessly disregarded the fact that there was no basis to deny the claim.  Further, delays could be attributed to a variety of persons and circumstances and not simply the carrier.

Date of Decision:  August 23, 2013

Deibler v. Nationwide Mutal Ins. Co., Civil Action No. 11-929, 2013 U.S. Dist. LEXIS 119723 (W.D. Pa. August 23, 2013) (Bissoon, J.)

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