In Scardino v. American International Ins. Co., the insureds claimed that the policy required the carrier to pay for the construction of a replacement home as being in the same location, where the newly constructed home had a different address in the same area. The District Court rejected this reading of the policy, as well as the argument that the carrier had a duty to value the home for coverage purposes prior to any loss; again on the basis that the policy language did not so provide. Because the first premise to a bad faith claim is that the insurer lacked a reasonable basis for denying benefits, and it was reasonable to deny the claims in this matter since the claims matter were not covered under the policy, there could be no bad faith.
Date of Decision: November 2, 2007
Scardino v. American International Insurance Company, No. 07-282, 2007 U.S. Dist. LEXIS 81567 (E.D. Pa. November 2, 2007) (Schiller, J.)