Bad Faith Homeowners Claims

As responsible homeowners, we are obligated to carry the proper insurance, and we assume when the need arises we will be taken care of. But what you will read here is contrary to Allstate’s slogan, "You’re in good hands." Recently, we successfully handled a breach-of-contract and "bad-faith" claim against this large carrier involving a homeowner’s insurance claim.

Fallen Tree, Unrelenting Rain, Unhealthy Mold

It was September 2003. Children were back in school. The leaves were starting to turn their brilliant fall colors. Unfortunately for our clients - a husband, wife and four young children - a large tree, from an adjacent property, fell onto their home resulting in a gaping hole in their roof. To further add to the mishap, there was a relentless heavy rainstorm that continued over the next 24 hours. As you can imagine, the damage was extensive to the structure of the house and all of its contents.

Family Flees Unlivable Home

Within 24 hours, mold was beginning to spread. Within several weeks, the mold count was so high it would have been a health risk to continue to live in the damaged home. Therefore, with the plight of an unhealthy, unlivable home, the family was forced to move into an apartment.

Carrier Delayed Investigating Claim

When our client needed Allstate’s assistance, where were those "good hands?" Instead of coming to their rescue, the company delayed investigating the claim. Represented by a public adjuster, our client spent the next six months battling over the amount of their losses.
To add insult to injury, Allstate’s representatives raised questions about every aspect of the claimed damages. They even speculated the house’s foundation was damaged before the tree struck it.

No Warning, No Reason

Just when you think it can’t get any worse, it did. Without warning and with no legitimate reason, Allstate stopped paying the family’s living expenses, which were included under their policy. Allstate decided on an arbitrary amount of damages, sent a check, and assumed the matter was closed. WRONG!
With the family financially strapped and emotionally stressed, we were hired to handle the claim that Allstate assumed was closed. Without hesitation, we immediately started suit against Allstate, based on claims of breach of contract and bad faith.
Under Pennsylvania law, an insured has the right to expect their insurance carrier (auto, homeowner’s or business) will act in "good faith" in handling any claim presented.
"Bad faith" can include:
* The wrongful denial of a claim
* Delay in evaluating a claim
* No payment on a claim for no good reason.
Once this matter was "in suit" Allstate’s attorney immediately recognized Allstate had made bad decisions and there was a risk of an adverse verdict, should the case go to trial. Within weeks, Allstate was back to the negotiating table and expressed a very serious interest in trying to "make things right".
Over the next month, we presented our evidence of the extensive and life-threatening damages, including an assessment by a structural engineer, confirming, that without a doubt, the damage to the house was indeed the result of the accident.

Settlement Within 3 Months of Filing Lawsuit

Within three months of filing the lawsuit, we reached an amicable settlement, which included the payment of the entire applicable policy limits under the homeowner’s policy, as well as additional damages for aggravation, inconvenience and attorney’s fees, under the bad-faith law.
What started out as a homeowner’s claim that led to a calamity, has a happy ending because our client is now in a position to completely rebuild their home.