This blog has discussed insurance bad faith claims based on an insurer engaging in conduct designed to deny timely and full payment of a claim, but a recent Memorandum Order from the Western District of Pennsylvania applied insurance bad faith law in a novel way that benefited the policyholder. Although this law is not controlling in Florida, it demonstrates the benefit of creative lawyering when you are pursuing litigation against an insurance company for bad faith practices.
In Selmek v. State Farm Fire and Casualty Company, the homeowners, a husband and wife, suffered damage to the roof of their detached garage during a windstorm. The policyholders submitted a claim for damage to the roof caused by a storm when shingles blew off the roof. An adjuster for the carrier requested that the husband assist the adjuster in measuring the roof. The husband also provided the adjuster with his ladder to provide access to the roof.
Following the inspection, the adjuster instructed the husband to go onto the roof of the garage and cover the roof with a tarp to mitigate further damage from leakage where the tiles were missing. The husband did as instructed and fell through the roof into the structure and onto a landing. The husband experienced a serious spinal cord injury that resulted in his suffering paraplegia.
The relevant policy provisions that the adjuster relied on in advising the husband to attempt to take actions to mitigate further damage were summarized by the court as follows:
The policy further provides that, after a loss, the insured shall “protect the property from the further damage or loss, make reasonable and necessary temporary repairs required to protect the property, [and] keep an accurate record of repair expenditures.”
It explicitly provides that State Farm “does not insure under any coverage for any loss which would not have occurred in the absence of . . . [n]eglect, meaning neglect of the insured to use all reasonable means to save and preserve property at and after the time of a loss, or when the property is endangered.”
“If damage is covered by a loss insured, [State Farm] will pay the reasonable and necessary cost you incur for temporary repairs to covered property to protect the property from further immediate damage or loss.”
While these types of provisions to prevent further damage are common, the policyholders in this case contended that the insurer acted in bad faith toward the insured by directing the insured to engage in conduct that placed the insured at risk of severe injury. The policyholders alleged that “the insurer placed its own interests in adjusting the claim ahead of the interest of its insured by placing the insured in jeopardy of physical injury in order to save money on an insurance claim.” The court refused to dismiss the bad faith claim.
Although it is unclear whether the judge or jury will award a judgment to the policyholders in this insurance bad faith lawsuit, this case reveals the benefits of creative lawyering. Bad faith claims can take on many forms, which makes it essential to have an experienced insurance bad faith attorney represent your interests when your insurance company fails to act fairly in processing your claim.
You can reach Miami Insurance Claims Lawyer J.P. Gonzalez-Sirgo by dialing his direct number at (786) 272-5841, calling the main office at (305) 461-1095, or Toll Free at 1 (866) 71-CLAIM or email Attorney Gonzalez-Sirgo directly at [email protected].