CASE STUDY: BAD FAITH CASE DISMISSED AFTER INVESTIGATION
Adjuster Consulting was hired to review a legal Bad Faith case against an insurance company. The loss took place in a state with collapsible soils, which shrink when wet and can cause foundations to crack, sink and collapse. The insured purchased their home after being notified by the home inspector that the foundation was cracking and sinking. Over time, improper drainage caused water to back up, and the foundation, interior walls and ceiling cracked and settled more.
The insured filed an insurance claim for settlement and collapse. The insurance company sent out an independent adjuster and an engineer, who cited inadequate design of roof drainage in the ground piping as the cause of damage. The insurance company issued a denial letter stating the loss wasn’t covered by a covered cause. The insured disagreed with the finding and filed a Bad Faith suit against the insurance company, alleging that the roof drains were plumbing systems, and therefore covered. The insured also alleged that the insurance company didn’t respond timely and did not act in good faith based on claims handling guidelines.
Adjuster Consulting reviewed communications from the insurance company, determining they responded to every call and email from the insured, as well as letters and emails from the attorney. We prepared a timeline to illustrate the facts and issued a comprehensive report to the attorney for the insurance company, which was written into their brief. The court issued a summary judgment and dismissed the case.