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PA Superior Court Tackles Bad Faith.

December 3, 2007

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<em>Greene v. United Services Automobile Ass'n</em> arises out of a leaking roof first party claim. When the carrier only paid for repairs to the part of the roof actually damaged, the insured commenced a bad faith/breach of contract suit and argued that the carrier was obligated to pay for replacing the whole roof. The trial court agreed with the carrier in respect of how much roof repair it was obligated to pay for. The trial court also denied the bad faith claim. On appeal, the Suprerior Court held that to prove bad faith, "an insured must show there was no reasonable basis for denying benefits and the insurer knew or recklessly disregarded that it lacked such a basis. In addition, a party must show that the insurer breached its duty of good faith through some motive of self-interest or ill-will." The Superior Court further noted that self-interest or ill-will was not a third prong of a bad faith test, but rather bore on the issue of whether the insurer lacked a good faith basis to deny the claim.
<a href="http://www.palawweekly.com/plw/printarticle.aspx?ID=24548">http://www.palawweekly.com/plw/printarticle.aspx?ID=24548</a>

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