Newsletter RSS

Mealey's Insurance Bad Faith

  • July 02, 2025

    Fungus Coverage Provision Does Not Provide Coverage For Water Loss Claim

    MILWAUKEE — A commercial property insurer did not breach its contract and act in bad faith in refusing to pay an insured’s claim for water damage under the policy’s additional coverage provision for fungus, rot and bacteria because the water damage was caused by repeated seepage or leakage of water, an excluded cause of loss, a Wisconsin federal magistrate judge said July 1 in granting the insurer’s motion to dismiss.

  • July 02, 2025

    No Coverage Owed For Roof Damage; Defective Materials Exclusion Precludes Coverage

    GALVESTON, Texas — No coverage is owed under a homeowners policy for roof damage because the homeowners insurer met its burden of showing that the damage was caused by defective roof shingles, an excluded cause of loss, and the insured failed to meet his burden of showing that some of the damage was caused by a hailstorm, a Texas federal magistrate judge said in granting the insurer’s motion for summary judgment on the breach of contract and extracontractual claims.

  • July 02, 2025

    Breach Of Contract, Extracontractual Claims Against Insurer Are Time-Barred

    WACO, Texas — An insured’s breach of contract and extracontractual claims alleged against a homeowners insurer cannot proceed because the claims are barred by the applicable two-year statute of limitations, which began to run when the insurer denied the insured’s claim for damages to his home incurred during a storm, a Texas federal magistrate judge said in recommending that the insurer’s motion for summary judgment be granted.

  • June 30, 2025

    Earth Movement Exclusion Bars Coverage For Foundation Damage, Judge Says

    SIOUX CITY, Iowa — An earth movement exclusion clearly applies to bar coverage for foundation damage to an insured home even if the cause of the foundation damage was an excess amount of water flowing from a burst pipe within the home, an Iowa federal judge said in granting a homeowners insurer’s motion for summary judgment on breach of contract and bad faith claims.

  • June 30, 2025

    California Insureds Allege Insurers Underinsured Homes Destroyed In Wildfires

    LOS ANGELES — In two separate complaints filed in Los Angeles County Superior Court, insureds whose homes were destroyed in the January wildfires allege that their homeowners insurers underinsured their homes, leaving the homeowners unable to rebuild their destroyed homes.

  • June 27, 2025

    Judge Refuses To Toss Bad Faith Claim In Coverage Suit Over Antitrust Conspiracy MDL

    DENVER — A federal judge in Colorado denied a data liability protection insurer’s motion to dismiss a common-law bad faith claim brought by a multifamily housing lessor insured in its lawsuit seeking coverage for an underlying multidistrict litigation alleging that it was involved in an antitrust conspiracy when it used revenue management software to artificially inflate multifamily housing rents above market across the country.

  • June 27, 2025

    Breach Of Contract, Bad Faith Claims To Proceed Against Life Insurer, Judge Says

    FRESNO, Calif. — A life insurer’s filing of a third-party interpleader complaint does not absolve it of liability for a beneficiary’s breach of contract and bad faith claims based on the life insurer’s delay in handling the beneficiary’s claim after the insured’s death, a California federal judge said in partially denying the life insurer’s motion for summary judgment.

  • June 26, 2025

    Auto Insurer Prevails On Summary Judgment; Bad Faith Claims Cannot Proceed

    PHILADELPHIA — A statutory bad faith claim alleged against an auto insurer cannot proceed because the insureds failed to present any evidence supporting their contention that the insurer acted in bad faith in handling their claim, a Pennsylvania federal judge said in granting the insurer’s motion for summary judgment.

  • June 26, 2025

    Insured Seeks More Than $5M From Property Insurer For Business Income Losses

    PORTLAND, Ore. — An insured hotel filed suit in Oregon federal court, seeking more than $5 million from its commercial property insurer for business income losses and extra expenses incurred as a result of water damage and the repairs necessitated by the water damage.

  • June 26, 2025

    California Federal Judge Gives Disability Insurers Win In Breach, Bad Faith Row

    LOS ANGELES — Granting summary judgment for insurers in an individual disability insurance (IDI) dispute, a California federal judge ruled in part that insurers were prejudiced by late notice of the claim.

  • June 26, 2025

    Insurer Was Not Contractually Bound To Provide COVID-19 Premium Relief, Judge Says

    SAN DIEGO — A California federal judge on June 25 granted an auto insurer’s motion for summary judgment on a claim alleging that the insurer breached the implied covenant of good faith and fair dealing by not sufficiently refunding policyholders a percentage of premium payments made during the COVID-19 pandemic because the insurer was not contractually bound to refund any premiums under its auto policies.

  • June 26, 2025

    Questions Of Fact Exist On Insurer’s Decision Not To Settle, Federal Judge Says

    BATON ROUGE, La. — A Louisiana federal judge denied a third-party claimant’s motion for summary judgment in a bad faith suit stemming from an insurer’s failure to settle a claim on behalf of its insured after determining that questions of fact exist regarding the reasonableness of the insurer’s decision not to settle the claim on behalf of its insured.

  • June 26, 2025

    Missouri Judge Enters $43.8M Judgment Against Law Enforcement Liability Insurers

    JEFFERSON CITY, Mo. — A Missouri judge entered a $43.8 million final judgment against law enforcement liability insurers after a jury determined that the insurers acted in bad faith and vexatiously refused/delayed a claim for coverage of a lawsuit brought against the city of Columbia, Mo., by a man who was convicted and incarcerated for robbery and homicide and later discharged from custody.

  • June 25, 2025

    1st Circuit Partly Reverses Ruling In Coverage Suit Over Hurricane Maria Damage

    BOSTON — The First Circuit U.S. Court of Appeals reversed a lower federal court’s denial of an insurer’s postverdict motion to reduce a jury’s $873,000 contractual damages award and to set aside a jury’s $250,000 consequential damages award in a Hurricane Maria coverage dispute and affirmed the lower court’s denial of the insured’s postverdict motion for attorney fees and prejudgment interest.

  • June 23, 2025

    Insurer Owed No Duty To Ensure Mold Cleanup Work Was Properly Completed

    CHICAGO — An Illinois federal magistrate judge on June 20 partially granted a homeowners insurer’s motion for summary judgment on a breach of contract claim alleging that the insurer owed a duty to ensure that water and mold remediation work at an insured home was properly completed because the policy at issue does not impose any such duty on the insurer.

  • June 23, 2025

    Judge Denies Insured’s Motion For Relief From Judgment In COVID-19 Coverage Suit

    ELIZABETH CITY, N.C. —A federal judge in North Carolina denied a hotel and restaurant owner insured’s motion for relief from a March 4, 2021, judgment dismissing its breach of contract and bad faith lawsuit arising from the coronavirus pandemic, rejecting the insured’s argument that the North Carolina Supreme Court’s ruling in N. State Deli, LLC v. Cincinnati Ins. Co. constitutes extraordinary circumstances that warrant relief.

  • June 19, 2025

    Insureds’ Breach Of Contract, Bad Faith Suit Remanded To California State Court

    FRESNO, Calif. — A breach of contract and bad faith suit filed against a homeowners insurer must be remanded to state court because the insurer failed to meet its burden of proving by a preponderance of the evidence that the amount in controversy exceeds the federal jurisdictional minimum, a California federal judge said, noting that the insurer specifically failed to provide a reasonable estimate of the amount of attorney fees that could potentially be awarded to the insureds.

  • June 18, 2025

    Plaintiff Cites N.Y. Federal Ruling In Discovery Row Involving Reinsurance Info

    STATESVILLE, N.C. — The plaintiff in a bad faith suit over an excess liability insurer’s alleged duty to indemnify has filed a notice of supplemental authority in which it directs the attention of a North Carolina federal court to a New York federal court ruling that it says “held that reserve and reinsurance information is discoverable in an insurance coverage action.”

  • June 18, 2025

    Auto Insurer Did Not Act In Bad Faith, Judge Says In Granting Summary Judgment

    FRESNO, Calif. — A bad faith suit filed against an auto insurer cannot proceed because there is no evidence from which a jury could conclude that the insurer acted in bad faith in failing to settle an assignee’s claim for injuries, a California federal judge said in granting the auto insurer’s motion for summary judgment.

  • June 18, 2025

    Lower Court Properly Found Auto Insurer Acted Reasonably In Handling Claim

    SEATTLE — A district court did not err in finding that an auto insurer acted reasonably in handling an insured’s claim for lost wages and damages following the insured’s involvement in an auto accident and also did not err in finding that the insurer’s filing of a counterclaim for fraud was not an act of insurance bad faith, the Ninth Circuit U.S. Court of Appeals said in affirming the district court’s ruling.

  • June 12, 2025

    Insureds’ Motion To Strike Portions Of Amended Answer In Fire Damage Suit Denied

    AKRON, Ohio — An Ohio federal judge denied a motion to strike portions of an insurer’s amended answer in a bad faith suit stemming from the insurer’s handling of a fire damage claim after determining that the insureds did not meet their burden of showing that the insurer failed to follow the Federal Rules of Civil Procedure.

  • June 12, 2025

    Arbitration Demand, Bad Faith Claim Against Auto Insurer Fail, Utah Judge Says

    SALT LAKE CITY — An insured’s demand for arbitration and its bad faith allegation cannot proceed against an auto insurer because the policy does not allow for arbitration for underinsured motorist (UIM) claims and the insured failed to show that the auto insurer acted unreasonably in handling a UIM claim, a Utah federal judge said in granting the insurer’s motion to dismiss.

  • June 12, 2025

    Insured Allowed To Amend Bad Faith Complaint To Name Correct Auto Insurer

    SEATTLE — A Washington federal judge granted an auto insurer’s motion to dismiss an insured’s breach of contract and bad faith suit but said the insured is permitted to amend the complaint to name the proper insurer in the body of the complaint.

  • June 12, 2025

    Breach Of Contract, Bad Faith Claims Fail In Rental Coverage Dispute

    BOSTON — A landlord is not entitled to additional coverage for lost rental income under a landlord dwelling policy because the landlord continued to collect rental payments from its tenants for alternative housing after the tenants’ units were rendered uninhabitable by water damage, a Massachusetts federal magistrate judge said in granting the insurer’s motion for summary judgment on breach of contract and bad faith claims.

  • June 11, 2025

    Reinsurer Loses Bid To Dismiss Counterclaims In Case Arising From Vesttoo Collapse

    BOSTON — Counterclaims against a commercial reinsurer survived dismissal in litigation connected to the collapse of Vesttoo Ltd., with a Massachusetts state court judge ruling in part that pay-as-paid provisions “protected only the primary insurers, and the ‘follow form’ provision in the Reinsurance Certificates did not rewrite them to protect [the reinsurer] as well.”