JUNE 2006 BAD FAITH CASES
PLAINTIFF STATED BAD FAITH CLAIM WHERE “HOUSEHOLD EXCLUSION” DID NOT APPLY TO PREVENT STACKING (Philadelphia Federal)
June 29, 2006
In Kraut v. Farmers New Century Insurance Company, the U.S. District Court for the Eastern District of Pennsylvania rejected the insurer’s argument that Plaintiff’s insurance claims were excluded. Specifically, Plaintiff purchased two separate insurance policies after being advised he could not obtain coverage for both of his cars under the same policy. Plaintiff also elected to retain “stacking of his underinsured motorist coverage,” which included $100,000 in each policy. After Plaintiff made a claim for underinsured benefits, the carrier argued that the coverages of the two policies could not be stacked, and that the maximum coverage was $100,000. This argument was based upon a “household exclusion” precluding stacking of coverages; however, the court determined that this provision had no application, since plaintiff was the injured party, and plaintiff was the owner of both of the vehicles insured under the respective policies. The court accordingly found the above allegations clearly sufficed to allege a basis for bad faith damages, thus denying Defendant’s Motion to Dismiss.
Date of Decision: June 21, 2006
Kraut v. Farmers New Century Ins. Co.
, United States District Court for the Eastern District of Pa, No. 06-CV-01086-JF, 2006 U.S. Dist. LEXIS 41944 (E.D. Pa. June 21, 2006) (Fullam, S. J.)
Posted in PA - Coverage Issues