Most jurisdictions recognize that insurance contracts carry an implied covenant of good faith and fair dealing. When the implied covenant is breached, an insured may bring a cause of action for bad faith. The major test for determining bad faith liability is whether the insured’s refusal to pay a claim is unreasonable. The manner in which a claim investigation is handled may lead an insured to believe the denial of a claim was unreasonable. Two recent cases from California and Pennsylvania examine the relationship between claim investigations and bad faith suits. In Adams v. Allstate Ins. Co., 187 F.Supp.2d 1219 (C.D. Cal. 2002), a California district court ruled that the genuine dispute doctrine precluded a finding of bad faith. Gilbert and Paula Hogan submitted a claim to Allstate under their homeowners policy
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