APRIL 2018 BAD FAITH CASES: REFUSING TO ADOPT INSURED’S EXPERT OPINION AND RELYING ON THE INSURER’S OWN EXPERT IS NOT BAD FAITH (Philadelphia Federal)

A large tree fell on the insured’s home, causing significant damage. Insurer retained an expert who estimated the total cost of repairs at nearly $120,000. After the insurer remitted this amount to the insured, the insured then retained another expert who estimated the repairs at nearly $290,000, citing allegedly necessary structural repairs.

The insurer argued that the second expert’s estimate related to improving the home rather than restoring it to its pre-damaged condition. The insurer’s expert conducted several additional inspections, and after submitting three additional reports over the course of two years, concluded that there remained no evidence of necessary larger structural repairs. The insured brought suit for bad faith and insurer moved for summary judgment.

The Court granted summary judgment in favor of the insurer, holding that its expert’s investigation was sufficiently thorough. The Court further held that “[t]he duty of good faith does not require [insurer] to adopt its insured’s position on the extent of damage, the ‘most economical approach’ to repair the home[,] or the value of a claim.”

Date of Decision: March 30, 2018

Aaron v. State Farm Fire & Cas. Co., Civil Action No. 17-2606 (GJP), 2018 U.S. Dist. LEXIS 54163 (E.D. Pa. Mar. 30, 2018) (Pappert, J.)