Mealey's Insurance Bad Faith
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February 20, 2026
Oklahoma Law Bars Arbitration Of Storm Damage Insurance Dispute, Judge Says
OKLAHOMA CITY — An Oklahoma federal judge denied a group of insurers’ motion to compel arbitration of a dispute over an insured’s claim for storm damage to a commercial property under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention), opining that Oklahoma state law reverse-preempts the convention and bars arbitration of this type of insurance dispute.
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February 20, 2026
Settlement Reached After Counterclaims Dismissed In Coverage Dispute Over Fire
BOISE, Idaho — The parties to a coverage dispute over fire damage after a construction worker discarded oil-soaked rags reached a settlement after a federal judge in Idaho granted the insurer’s motions to dismiss bad faith counterclaims filed by the construction company and seller of the property because they did not allege sufficient facts to support the counterclaims.
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February 20, 2026
Insurer Reasonably Relied On Engineer’s Report; Bad Faith Claim Fails, Judge Says
TUSCALOOSA, Ala. — A farm owner’s bad faith claim against an insurer cannot proceed because the insurer reasonably relied on an engineer’s report when it partially denied coverage for damage to two poultry houses based on the policy’s wear and tear exclusion, weight of snow and ice exclusion and improper workmanship exclusion, an Alabama federal judge said in granting the insurer’s motion for summary judgment.
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February 20, 2026
Insurer’s Partial Payment For Storm Damage Was Arbitrary, Capricious, Insureds Say
AUSTIN, Texas — A homeowners insurer’s failure to promptly and adequately pay its insureds for the full value of their claim for damages to their home caused by a hail and windstorm was arbitrary and capricious, the insureds maintain in a complaint filed in Texas federal court.
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February 19, 2026
Breach Of Contract Claim Is Only Claim To Proceed Against Homeowners Insurer
SYRACUSE, N.Y. — An insured’s claim for breach of the covenant of good faith and fair dealing must be dismissed as it is duplicative of the insured’s breach of contract claim, a New York federal judge said after also determining that the insured’s request for extracontractual damages cannot proceed.
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February 19, 2026
Judge Allows Experts, Certifies Class On Whether UM/UIM Coverage Properly Applied
PHOENIX — An Arizona federal judge agreed to certify a class action alleging that an insurer underpaid insureds by failing to stack uninsured motorist (UM) or underinsured motorist (UIM) coverage for policyholders who had multivehicle policies and rejected efforts by the insurer to exclude expert testimony on class certification.
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February 18, 2026
Stay Granted In Auto Accident Coverage Dispute Involving Insolvent Insurer
LAS VEGAS — After being advised that plaintiffs are seeking administrative remedies in a bad faith breach of contract dispute involving an insolvent insurer regarding coverage for an auto accident that resulted in deaths and injuries, a Nevada federal judge granted the plaintiffs’ motion for a stay.
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February 18, 2026
Bifurcation In UIM Benefits Suit Not Warranted, Federal Magistrate Judge Says
LAS CRUCES, N.M. — A New Mexico federal magistrate judge denied an auto insurer’s motion to bifurcate an insured’s claim seeking underinsured motorist (UIM) benefits from the insured’s extracontractual claims after determining that the extracontractual claims are not contingent on the success of the UIM benefits claim.
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February 17, 2026
Calif. Federal Judge Rules On 20 Motions In Limine In Aircraft Insurance Dispute
SAN DIEGO — A California federal judge granted in part, denied in part and reserved ruling in part on a series of cross-motions in limine in a private jet insurance coverage dispute, excluding evidence of reinsurance and loss reserves, bifurcating punitive damages, limiting expert and regulatory evidence and reserving authentication and hearsay objections to competing insurance proposals for determination at trial.
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February 13, 2026
Pa. Federal Judge Partly Grants Motion To Compel In LTD Benefits Case
WILLIAMSPORT, Pa. — A Pennsylvania federal judge on Feb. 12 declined to compel production of “batting average” information and communications concerning state or federal investigations but ordered the administrator of a group long-term disability (LTD) policy to provide some of the information a claimant seeks regarding incentives for insurance adjusters and reviewing physicians, the administrator’s review policies and procedures and its use of a third-party medical review company.
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February 13, 2026
Breach Of Contract, Bad Faith Claims Will Proceed Against Insurer, Judge Says
TULSA, Okla. — Breach of contract and bad faith claims will proceed against a homeowners insurer in federal court, an Oklahoma federal judge said after determining that the insureds’ suit was properly removed to federal court because complete diversity of citizenship exists as the insureds’ claims against the insurer’s agent fail.
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February 13, 2026
2 Of Assignee’s Claims Against Auto Insurer Can Proceed, Federal Judge Says
LAS VEGAS — Claims alleging breach of contract and breach of the implied covenant of good faith and fair dealing brought by the assignee of an insured against an auto insurer can proceed because a question of fact exists as to when the insured knew or should have known that he was injured, a Nevada federal judge said in partially denying the insurer’s motion for summary judgment.
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February 11, 2026
Question Of Fact Exists As To Whether Auto Insurer Acted In Bad Faith, Judge Says
PHOENIX — An insured’s bad faith claim against an auto insurer can proceed, an Arizona federal judge said, after determining that a question of fact exists as to whether the insurer’s refusal to pay its policy limit until after an arbitration award was entered in favor of the insured constitutes bad faith.
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February 11, 2026
Panel Affirms Judgment In Insurer’s Favor In Bad Faith Suit Arising From Hurricane
NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Feb. 10 affirmed a lower federal court’s judgment in favor of an insurer in Louisiana insureds’ breach of contract and bad faith lawsuit arising from Hurricane Ida damage, rejecting the insureds’ argument that the lower court reversibly erred in excluding both evidence of the insureds’ appraisal award amount and the appraiser’s position regarding the value of their damages.
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February 11, 2026
Extracontractual Claims Against Homeowners Insurer Are Not Supported, Judge Says
GREENVILLE, Miss. — Extracontractual claims alleged against a homeowners insurer in a coverage dispute over water damage to the insureds’ home cannot proceed because the insureds failed to provide sufficient facts to support their claim for bad faith and failed to show that the insurer owed a duty of care independent of the insurance contract to support their claim for negligence, a Mississippi federal judge said in granting the insurer’s motion to dismiss.
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February 10, 2026
Disability Determination, Other Issues Briefed Before 6th Circuit In Benefits Case
CINCINNATI — Arguing in part that the claimant’s “proven ability to work coupled with the improvement documented by her own treating providers” was sufficient to show that she was not totally disabled under the terms of the long-term disability (LTD) plan, appellants urged the Sixth Circuit U.S. Court of Appeals to affirm denial of benefits for a project director who stopped working because of symptoms she attributed to long COVID.
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February 06, 2026
Federal Jury: Insurer Acted In Bad Faith, Owes Church $2.8M In Additional Coverage
NEW ORLEANS — A jury before a Louisiana federal judge on Feb. 5 held that an insurer acted in bad faith in its handling of the church insured’s claim arising from Hurricane Ida property damage, concluding that the insurer owes the insured $2,818,230.66 in additional coverage for its claim, $371,265 for the insurer’s bad faith and $371,265 for the insurer’s failure to timely pay.
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February 06, 2026
Owner Of Storm-Damaged Texas Buildings Files Complaint Alleging Insurer Underpaid
DALLAS — The owner of Texas commercial buildings that were damaged during a 2024 winter storm sued its commercial property insurer in a state court alleging breach of contract and violations of the Texas Deceptive Trade Practices Act (DTPA) for “significantly” underpaying its damages claim “based on the insufficient inspection with the intention of minimizing its liability.”
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February 05, 2026
5th Circuit Affirms Another Denial Of Insurers’ Bid To Arbitrate Hurricane Claims
NEW ORLEANS — In the latest of multiple rulings in which the Fifth Circuit U.S. Court of Appeals has reversed course from its prior precedent and proceeded to bar arbitration of Louisiana hurricane insurance disputes following new Louisiana Supreme Court precedent, a panel on Feb. 4 issued a per curiam unpublished opinion affirming the vacatur of a previous order compelling arbitration of insurance and bad faith claims arising out of hurricane damage to a hotel.
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February 05, 2026
Insured Granted Summary Judgment On Interpretation Of Policy’s ‘But For’ Term
DALLAS — On remand from the Fifth Circuit U.S. Court of Appeals, a Texas federal judge partially granted a motion for summary judgment filed by Southwest Airlines Co. in a dispute over excess coverage for income losses sustained by the airline as a result of a computer system failure in 2016, agreeing with a magistrate judge’s conclusion that the term “but for” as used in the excess policy’s definition of loss must be interpreted as meaning “except for.”
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February 04, 2026
Judge Refuses To Dismiss BSA Settlement Trustee’s Bad Faith Suit Against Insurers
DALLAS — A federal judge in Texas denied insurers’ motion to dismiss the trustee of the Boy Scouts of America Settlement Trust’s bad faith lawsuit seeking a declaration that the insurers have breached or will breach their insurance policies by refusing to provide coverage for sexual abuse claims, rejecting the insurers’ argument that the lawsuit should be dismissed on forum non conveniens grounds or stayed under the Colorado River abstention doctrine.
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February 04, 2026
Split Kentucky Panel Orders New Damages Trial In STD Benefits Case
FRANKFORT, Ky. — In an unpublished opinion, a split Kentucky appeals panel reversed and remanded a ruling against the third-party administrator of a short-term disability (STD) plan in a long-running case where a jury awarded the claimant $7,125,000 in emotional distress and punitive damages
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January 30, 2026
6th Circuit Grants Rehearing En Banc In Class Action Suit Against Auto Insurer
CINCINNATI — The Sixth Circuit U.S. Court of Appeals on Jan. 29 granted a petition for rehearing en banc and vacated a panel majority’s opinion that found that an insured met the necessary requirements to certify a class and had standing to bring a class action suit that alleges that an auto insurer breached its contract and acted in bad faith in determining a vehicle’s total loss value.
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January 30, 2026
Property Insurer’s Denial Of Coverage For Roof Damage Was Not Bad Faith, Judge Says
JOHNSTOWN, Pa. — An insured’s bad faith claim against a commercial property insurer cannot proceed because the insurer’s denial of coverage for roof damage was not unreasonable, a federal circuit judge, sitting by designation in Pennsylvania federal court, said after determining that a question of fact exists over the cause of the roof damage.
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January 29, 2026
Questions Of Fact Exist As To Whether Auto Insurer Acted In Good Faith, Judge Says
TAMPA, Fla. — A Florida federal judge denied an auto insurer’s motion for summary judgment after determining that questions of fact exist regarding whether the insurer acted in good faith throughout the entire claims process and whether the insurer caused an excess judgment to be entered against its insureds in a suit stemming from an auto accident.