JULY 2007 BAD FAITH CASES NO BAD FAITH ADJUSTMENT OF INSURED’S LOSS WHEN THE VALUE OF THE LOSS WAS LEGITIMATELY SUBJECT TO DISPUTE (Third Circuit)
Plaintiff filed a bad faith claim against her insurer alleging that it improperly valued the damage to her property. Plaintiff had stored property in a rental storage unit and the roof on the storage facility leaked and subsequently caused damage to her property. Plaintiff claimed that the property damage was approximately $120,000 but refused to allow inspection of the damaged property for a significant period of time.
Eventually, an inspection was permitted and the adjuster for the insurer valued the loss at approximately $3,600. Soon after suit was brought, the insurer tendered the remaining amount under the policy paying out a total of $15,000.
The District Court dismissed Plaintiff’s bad faith claim. On appeal, the United States Court of Appeals for the Third Circuit affirmed holding that the insurer had not acted in bad faith since the value of the loss was debatable and that the insurer could not have settled the claim until Plaintiff had permitted an inspection of the property.
February 7, 2007
Kane v. U-Haul International, United States Court of Appeals for the Third Circuit, No. 05-5002, 2007 U.S. App. LEXIS 2987 (3rd Cir. Feb. 7, 2007) (Fisher, J.)