Bad Faith Sentinel - August 2013

In This Issue:

- Eastern District of Pennsylvania: Insurer’s “Paid When Incurred” Practice is Not Bad Faith or a Violation of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law

- California Court of Appeal: Insurer May Commit Bad Faith by Interpreting a Policy Provision in Direct Conflict with an Unpublished Decision by Appeal Court in the Same State on the Same Issue

- California Supreme Court Permits Claims Based on Conduct that Violates Both the Unfair Insurance Practices Act and Other Statutes to Proceed

- Missouri Court Dismisses Bad Faith Claim Tied to Same Conduct Giving Rise to Insured’s Breach of Contract Claim.

- Excerpt from Eastern District of Pennsylvania: Insurer’s “Paid When Incurred” Practice is Not Bad Faith or a Violation of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law:

"Pellegrino v. State Farm Fire and Cas. Co., No. 12-2065, 2013 WL 3878591 (E.D. Pa. July 29, 2013). The Eastern District of Pennsylvania held that insurer could withhold payments under its “paid when incurred” practice until repairs to undamaged property that needed to be replaced to match damaged portions of property were complete. The insurer’s refusal to pay actual cash value for those repairs did not support a claim of bad faith or violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law as the policy obligated the insured only to pay to repair damaged property."

Please see full alert below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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