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The insureds suffered damage to their motor home.  They allege that in initially looking of insurance coverage on the motor home, and inquiring with the insurer about its motor home insurance, the insurer represented there would be coverage for the type of loss at issue.

Later, after the policy was issued and the loss actually occurred, the insurer “initially sent a claims adjuster who concluded that the damage was a covered loss under the policy, so Plaintiffs took the motor home to a qualified mechanic to perform repairs. Then, without explanation, [the insurer] sent a second claims adjuster to reevaluate the loss. The second adjuster concluded there was no coverage and [the insurer] denied payment [for the claim]. As a result, the repairs were never performed, resulting in additional damage to the motor home, including electrical issues, decay of the interior walls and mold.”

The insurer never altered its coverage denial, and the insureds sued for breach of contract, negligence, and bad faith.  The insurer moved to dismiss the bad faith and negligence claims. The motion was granted as to the negligence claim, but denied on bad faith.

As stated above, the insureds “alleged that one adjuster told them the loss was covered, that they relied upon this information to begin repairs on the motor home, and then a second adjuster inexplicably informed them without explanation that the loss was not covered.” The court found these facts sufficient to state a plausible bad faith claim.

MORAVIA MOTORCYCLE, INC. v. ALLSTATE INSURANCE COMPANY, U.S. District Court Western District of Pennsylvania No. CV 21-1274, 2022 WL 1457788 (W.D. Pa. May 9, 2022) (Dodge, M.J.)