{"id":891599,"date":"2017-02-01T10:43:00","date_gmt":"2017-02-01T17:43:00","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=891599"},"modified":"2017-02-01T10:43:00","modified_gmt":"2017-02-01T17:43:00","slug":"genuine-dispute-defense-bad-faith","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/genuine-dispute-defense-bad-faith\/","title":{"rendered":"The Genuine Dispute Defense and Bad Faith"},"content":{"rendered":"

Kevin Pollack | Property Insurance Coverage Law Blog<\/a> | February 1, 2017<\/p>\n

Insurers often seek to avoid liability for bad faith by asserting the \u201cGenuine Dispute Doctrine.\u201d Under the genuine dispute rule, an insurer\u2019s coverage or claim decision may not be in bad faith when it mistakenly withholds policy benefits, if the mistake is reasonable and is based on a legitimate dispute as to the insurer\u2019s liability.1<\/sup><\/p>\n

However, the genuine dispute doctrine is inapplicable when the coverage decision is reached as a result of a biased or inadequate investigation.2<\/sup> Under the genuine dispute doctrine, \u201c[a] genuine dispute exists only where the insurer\u2019s position is maintained in good faith and on reasonable grounds.\u201d3<\/sup><\/p>\n

Further, the reasonableness of the insurer\u2019s actions and decision to deny benefits is evaluated \u201cas of the time they were made rather than with the benefit of hindsight.\u201d4<\/sup>Therefore, an insurer seeking to justify its conduct on the basis of a genuine dispute must establish that it reasonably relied on the disputed issue at the time it made its decision to deny coverage, and that it informed its insured of the basis of the denial.5<\/sup><\/p>\n

The above legal principles provide important points:<\/p>\n