Mealey's Insurance Bad Faith : Mealey's : Legal News & Analysis

Mealey's Insurance Bad Faith

January 06, 2026
Homeowner Brings Breach Of Contract, Bad Faith Claims In Underpayment Dispute

LOS ANGELES — A homeowner alleges in a California state court that a property insurer breached its insurance contract and acted in bad faith by refusing to fully pay for covered wind, rain and water damage to his residence, instead issuing only partial payments totaling about $3,250 on a claim seeking nearly $97,000 in repair and mitigation costs.
January 06, 2026
Insured Urges High Court To Review Jurisdiction Ruling In PFAS Exposure Suit

WASHINGTON, D.C. — An insured urges the U.S. Supreme Court to grant its petition for a writ of certiorari seeking review of the Sixth Circuit U.S. Court of Appeals’ finding that a district court erred in remanding a declaratory judgment claim and retaining jurisdiction over breach of contract and bad faith claims in a dispute over coverage for underlying per- and polyfluoroalkyl substances (PFAS) exposure suits, noting in its reply brief that the case presents an “ideal opportunity” to resolve a split among the circuits regarding when a district court is required to exercise discretion over mixed claims.
January 05, 2026
Insured Failed To Show Homeowners Insurer Owes Additional Coverage, Judge Says

FORT WORTH, Texas — A Texas federal judge granted summary judgment in favor of a homeowners insurer after determining that the insured’s contractual and extracontractual claims cannot proceed because the insured failed to show that the homeowners insurer is liable for additional damages caused by a fire at the insured’s home.
January 05, 2026
Federal Judge Denies Auto Insurer’s Motion To Sever, Abate Extracontractual Claims

HOUSTON — An auto insurer failed to meet its burden of showing that it would be prejudiced if an insured’s contractual and extracontractual claims are tried together, a Texas federal judge said Jan. 2 in denying the insurer’s motion to sever and abate the insured’s extracontractual claims in a coverage dispute over repairs made to the insured’s vehicle.
January 02, 2026
Claims Over GEICO’s Post-Accident Offer Dismissed With Leave To Amend

RIVERSIDE, Calif. — A federal magistrate judge in California on Dec. 31 dismissed, largely with leave to amend, a pro se complaint accusing GEICO General Insurance Co. and 10 unnamed Does of various breaches, bad faith and fraud for various acts following a car accident, including offering an allegedly unreasonably low offer on an underinsured claim; the judge declined GEICO’s request to find that the bad faith claims were time-barred, opining that “the allegations in the Complaint do not clearly show when Plaintiff had the requisite factual basis to bring suit.”
January 02, 2026
Ohio Appeals Panel Reverses Dismissal Of Bad Faith, Breach Of Contract Claims

CLEVELAND — An Ohio appellate court reversed a trial court’s summary judgment in favor of a health insurer, holding that factual disputes over whether a lung transplant patient intentionally misrepresented his intent to reside in the insurer’s service area and his eligibility for Affordable Care Act Marketplace coverage precluded dismissal of breach of contract and bad faith claims arising from the rescission of the insured’s policy.
December 29, 2025
Summary Judgment Granted In Coverage Dispute Over Losses From Frozen Plumbing

HOUSTON — A Texas federal judge entered summary judgment in favor of an insurer, holding that freeze-related plumbing damage to a policyholder’s property was excluded from coverage because the insured intentionally turned off the heat and failed to drain the system, dismissing each of the five claims brought by the policyholder with prejudice.
December 29, 2025
Insured’s Bad Faith Claims Dismissed For Failure To Plead Unreasonable Conduct

DENVER — A Colorado federal judge dismissed without prejudice a policyholder’s breach of contract and bad faith claims arising from hailstorm damage to the insured’s property, ruling that the complaint alleged only a valuation dispute and conclusory claim-handling allegations without identifying a policy provision or facts showing an unreasonable delay or denial of benefits.
December 29, 2025
Federal Judge: Insured’s Summary Recitations Are Insufficient To Show Bad Faith

ALLENTOWN, Pa. — An insured’s allegations of bad faith in a lawsuit accusing her insurer of improperly refusing to pay her the correct underinsured motorist coverage are insufficient as they “suggest nothing more than a disagreement between the parties over the value of the . . . claim,” a federal judge in Pennsylvania ruled, dismissing that claim and leaving only a claim for breach of contract.
December 26, 2025
Judge: Pro Se Complaint Over GEICO’s Post-Accident Offer Stays In Federal Court

RIVERSIDE, Calif. — A federal magistrate judge in California ruled that a pro se complaint accusing GEICO General Insurance Co. and 10 unnamed Does of various breaches, bad faith and fraud for various acts following a car accident, including offering an allegedly unreasonably low offer on an underinsured claim, belongs in federal court due to diversity of citizenship and because the removal more than four months after the complaint was filed was timely.
December 24, 2025
Kentucky High Court Finds Some Information In Bad Faith Case Not Discoverable

FRANKFORT, Ky. — Finding that a trial court erred in ordering an employment practices liability insurer to produce all responsive documents relating to its insured’s claim for coverage and extensive personnel information in the insured’s bad faith suit against it, the Kentucky Supreme Court partially affirmed and partially reversed, remanding to the Court of Appeals with instructions to issue a writ of prohibition preventing the trial court judge from enforcing certain aspects of the discovery orders.
December 23, 2025
Judge Denies In Part Dismissal To Appraiser, Firm In Hurricane Coverage Dispute

NEW ORLEANS — A Louisiana federal judge denied in part an appraiser and his firm’s motion to dismiss claims against them in a Hurricane Ida insurance coverage dispute, denying dismissal of claims for fraud and civil conspiracy to commit fraud because they are adequately pleaded.
December 18, 2025
Insured’s Bad Faith Claim In Contamination Coverage Suit Cannot Proceed, Judge Says

NEWARK, N.J. — A bad faith claim alleged against a general liability insurer cannot proceed because the claim is duplicative of the breach of contract claim and the insured failed to meet its burden of showing that the insurer “lacked a fairly debatable reason” for denying the insured’s claim for environmental contamination cleanup costs, a New Jersey federal judge said Dec. 17 in granting the insurer’s motion to dismiss the bad faith claim.
December 18, 2025
Water, Mold Damage In Insured Home Caused By Excluded Causes Of Loss, Panel Says

PASADENA, Calif. — A district court did not abuse its discretion in granting a homeowners insurer’s motion for summary judgment in a water and mold damage coverage dispute because the evidence shows that a water leak in the insureds’ home was caused by the continuous seepage or leakage of water and wear and tear of the water pipe, both of which are excluded causes of loss under the policy, the Ninth Circuit U.S. Court of Appeals said.
December 18, 2025
Statute Of Limitations Bars Insured’s Claims In Water, Mold Damage Suit, Judge Says

RALEIGH, N.C. — An insured’s claims for breach of contract and bad faith in a water and mold damage coverage dispute cannot proceed because the claims are barred by the applicable three-year statute of limitations, a North Carolina federal judge said in granting a homeowners insurer’s motion for summary judgment.
December 16, 2025
Discovery Is Among Issues In 6th Circuit Appeal Of Non-ERISA Disability Case

CINCINNATI — Seeking reversal or at least remand of a decision upholding denial of her claim for long-term disability (LTD) benefits, a project director who stopped working because of symptoms she attributed to long COVID tells the Sixth Circuit U.S. Court of Appeals in her Dec. 15 opening brief that the trial court used the wrong standard of review and improperly denied her request for discovery and the appellees “acted arbitrarily by failing to consider critical treating-source medical opinions, relying on a materially inaccurate medical reviewer report, and dismissing [her] well-documented subjective symptoms.”
December 16, 2025
Dismissal Of Fraud Counterclaim OK’d In Captive Insurance Trade Secrets Case

PHOENIX — An Arizona federal judge approved a joint stipulation between an insurance brokerage firm and an ex-employee to dismiss without prejudice the employee’s counterclaim for fraud in which he alleged that the firm induced his continued employment through fictitious equity unit awards while concealing a forthcoming corporate acquisition that would render them worthless.
December 15, 2025
Suit Stemming From Sewer Drain Backup Should Be Dismissed, Magistrate Judge Says

TRENTON, N.J. — A New Jersey federal magistrate judge recommended that a breach of contract and bad faith suit filed against a homeowners insurer stemming from a claim for damages sustained as a result of a sewer drain backup be dismissed because the insureds failed to respond to numerous discovery deadlines.
December 15, 2025
Environmental Liability Insurer Breached Duty To Defend In Bad Faith, Judge Says

TACOMA, Wash. — An environmental liability insurer breached its duty to defend its insured in bad faith because an underlying water contamination suit alleges a potential for coverage under the policy at issue and the insurer initially acknowledged that there was a potential for coverage under the policy, a Washington federal judge said in granting the insured’s motion for summary judgment on breach of contract and bad faith claims.
December 15, 2025
Insurer’s Initial Offer, Delay In Communications Did Not Rise To Level Of Bad Faith

DENVER — An insured’s bad faith claims against an auto insurer cannot proceed because the insured failed to show that the insurer’s delay in communications and the insurer’s initial offer to settle the insured’s underinsured motorist (UIM) claim were unreasonable and rose to the level of bad faith, a Colorado federal judge said in granting the insurer’s motion for partial summary judgment.
December 15, 2025
Bad Faith Claim In Gas Pipeline Rupture Coverage Suit Cannot Proceed, Judge Says

BOISE, Idaho — A bad faith claim alleged against a commercial property insurer in a dispute over coverage for the rupture of a natural gas pipeline cannot proceed because a question of fact exists over whether coverage is owed under the policy, an Idaho federal judge said in partially granting the insurer’s motion for summary judgment.
December 15, 2025
Bad Faith, Negligence Claims Will Not Proceed Against Insurer In Storm Damage Suit

HUNTINGTON, W.Va. — Negligence and bad faith claims against a homeowners insurer cannot proceed, a West Virginia federal judge said after determining that the negligence claim arises under the insurance contract and the bad faith claim is duplicative of the breach of contract claim.
December 11, 2025
Homeowners Insurer’s Removal Notice Timely Filed, Indiana Federal Judge Determines

INDIANAPOLIS — An Indiana federal judge denied a motion to remand after determining that the homeowners insurer’s notice of removal was timely filed because it was filed within 30 days of the insurer learning that the amount in controversy exceeded the federal jurisdictional minimum amount of $75,000.
December 10, 2025
Townhome Management Appeals Finding Of Collusion In Case Over Defect Coverage

DENVER — A townhome management company, as subrogee for a contractor, appealed to the 10th Circuit U.S. Court of Appeals a Colorado federal judge’s grant of summary judgment in favor of an insurer in the management company’s case against the insurer for insurance bad faith regarding the coverage of an underlying action the company brought against the contractor for alleged defective construction work; the judge found that the facts established that a Nunn agreement between the company and the contractor was the result of collusion.