In Luse v. Liberty Mutual Fire Insurance Company, a fire occurred in the insureds’ home. They had insurance under a condominium policy that had been issued by the insurer. An employee of the insurer inspected the home three days after the fire, and despite observing significant damage, he concluded that the house was livable. He also determined that his employer’s policy would only provide secondary coverage for the damage because the insureds had an additional condominium policy which provided primary coverage.
One of the insureds had a history of respiratory issues, and in the two weeks after the fire, his oxygen saturation levels dropped. The insurer took immediate action to have the insureds relocated, but by that time the individual had already suffered from increased respiratory problems. However, the insureds had not notified the insurer of the individual’s respiratory or problems or their desire to relocate until the problems exacerbated.
The insureds filed a complaint based on insurance bad faith, asserting that the insurer failed to properly investigate the insureds’ claim once they had information that one of the insured’s suffered from respiratory issues, and that the insurer misinformed the insureds of the extent of their coverage.
The court determined that the insureds failed to show that there were genuine issues of material fact, as the insurer sent a representative to evaluate the damage, and the representative made a conclusion based on his findings. Also, no one told the representative or his employer about the insured’s respiratory problems or a desire to be relocated until over two weeks after the fire. Conclusions based on adequate investigations and informing the insureds that the company would be the secondary provider to the condominium policy do not constitute bad faith by any measure of the law. The insurer was only under a duty to reasonably investigate all of the claims, and the undisputed facts of the case suggested that its obligations were met. Therefore, the court granted the insurer’s Motion for Summary Judgment.
Date of Decision: July 7, 2010
Luse v. Liberty Mut. Fire Ins. Co., Civil No. 1:09-CV-1221, United States District Court for the Middle District of Pennsylvania, 2010 U.S. Dist. LEXIS 63225 (M.D. Pa. July 7, 2010) (Rambo, J.).