Is That Covered?

Michael R. Kelley – September 2014

If you or your clients have ever had the experience of submitting a claim to an insurance company, you probably know how difficult it can be to get the insurance company to pay the full amount of damages.  Even if the company agrees that a loss is covered, insurers frequently dispute the amount of the loss in an attempt to pay less.  Insurance companies have an approved list of experts (construction contractors, engineers, etc.) that they use to justify paying as little as possible.

In a bit of good news for policyholders, a Pennsylvania Court has held that an insurer’s failure to pay the proper amount of damages and follow its own appraisal rules may subject that insurer to bad faith damages.


In Currie et al. v. State Farm Fire & Casualty Co., No. 13-6713, 2014 WL 4081051 (E.D. Pa. Aug. 19, 2014), Robert and Kathleen Currie’s home was severely damaged by Superstorm Sandy in 2012.  State farm agreed that the loss was covered, but offered only $57,000 to cover the claim.  The Currie’s hired their own loss adjuster, who concluded that the total damages were actually $364,000.  Given the dispute, the Currie’s demanded that State Farm follow the appraisal process set forth in the policy to resolve the dispute.  State Farm refused and told the Curries to take its offer or get nothing.


The Eastern District Court in Pennsylvania ruled that State Farm’s arguments against using its own appraisal process were “disingenuous” and determined that the Currie’s bad faith claim against State Farm could proceed to trial.  If successful, the Curries can recover the full $364,000 for their loss, plus attorneys fees, punitive damages, and a special interest rate against State Farm.


Chalk one up for Policyholders!

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