WASHINGTON COURTS REJECT EXTRA-CONTRACTUAL CLAIMS AGAINST FIRST PARTY INSURERS

Earlier this week, two Washington courts rejected extra-contractual claims against first party property insurers that had paid out benefits and followed the appraisal provisions in their policies. 

In Pinney v. American Fam. Mut. Ins. Co. 2012 U.S. Dist. LEXIS 22328 (Feb. 22, 2012), United States District Court Judge Marsha Pechman granted summary judgment in favor of a property insurer that had paid to a homeowner, on a fire loss claim, consistent with the amounts awarded at appraisal.  Rejecting most of the homeowner's IFCA claim, Judge Pechman followed other recent decisions holding that alleged "violation of the enumerated WAC provisions alone is not sufficient to sustain a cause of action."  Judge Pechman allowed the insured to proceed on their extra-contractual claims to the extent that they were based upon the insurer's alleged failure to advise the insured of the alternative living expense benefits available under the policy.  

In Lloyd v. Allstate Ins. Co., 2012 Wash. App. LEXIS 340 (Feb. 21, 2012), the Court of Appeals (Div. II) affirmed the trial court's summary judgment ruling in favor of an automobile insurer who had paid the totaled value of a vehicle consistent with an appraisal award.  Rejecting the insured's bad faith claim, Division II concluded that, as a matter of law, the insurer had acted reasonably in its handling of the claim.   The appraisal award amount was nearly the same as the settlement amount that the insurer had offered before the insured demanded appraisal. 

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