In Todd Aaron, M.D. v. State Farm Fire & Cas. Co., No. 17-2606, 2018 WL 1565617 (E.D. Pa. March 30, 2018), a tree fell on the policyholder's house. The Court did not report any dispute over coverage. The policyholder, Dr. Aaron, and the insurance company disputed the amount of the loss however.
The insurance company hired an expert. He inspected the property four times at the request of the insurance company. Each time he stood by his original estimate for repairs.
During that time, the policyholder's expert also inspected the property, and wrote a competing estimate for repairs in a report. The policyholder sent the competing report to the insurance company, which is why the insurance company asked its own expert to revisit the property three times after the initial visit.
The insurance company wrote a check for the amount of repairs which its expert estimated four times. That is, the carrier wrote one check based on its expert's four inspections of the property which resulted in the same estimate each time.
Dr. Aaron insisted that instead the carrier should write a check for the amount of his own expert's estimate. He filed suit for breach of contract and statutory bad faith, among other things, when the carrier did not pay the amount of Dr. Aaron's expert's estimate.
The question under Pennsylvania law, as it would be under the law of first-party bad faith in most jurisdictions, was whether the carrier's conduct was reasonable. The Court held that it was and granted the carrier's motion for summary judgment on the first-party bad faith claim.
Or, to put it another way, the moral of the story is that if a tree falls in Pennsylvania, the policyholder's expert does not automatically get the final word.
Please Read The Disclaimer. © 2018 Dennis J. Wall. All Rights Reserved.
Comments