Back in May, 2014, parts of Berks and Lancaster counties were hit with a freak hail storm. With hail as large as tennis balls reported, homes and cars suffered significant damage. Hail damage is generally covered under auto and homeowner's insurance policies. But, what if the insurance company refuses to pay for all of the damage? Do policyholder's have any recourse?
A recent case, Valley Boys, Inc. v. State Farm Fire & Casualty Co., offers support to policyholders who believe that they have not been made whole for their damages. The Court in that case recently ruled that bad faith claims against State Farm may proceed, based upon allegations that State Farm failed to fully compensate 150 of its policy holders who suffered hail damage. The court found that the following practices were sufficient to support a claim of bad faith against State Farm:
-
Performing inadequate or outcome-oriented investigations.
-
Refusing to consider [policyholders'] estimates.
-
Misleading the homeowners…regarding policy terms, conditions and coverage.
-
Denying coverage, delaying payment and refusing to pay for repairs.
If bad faith is proven at trial, State Farm could be liable for $3 million in underpaid claims, the policyholders' attorneys' fees and for punitive damages of more than $25 million.
