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Rational differences in claim valuations do not lead to an inference of bad faith on the part of an insurer without more.

January 3, 2017
Enrique v. State Farm Mut. Auto. Ins. Co., 142 A.3d 506 (Del. Jun. 14, 2016)

In a bad faith action against an insurer for denial of UM benefits, the trial court granted the insurer’s motion for summary judgment. The insured argued that the insurer’s valuations of her claim were continually revised up and, ultimately, the jury had reached a verdict that was greater than all offers and counteroffers of the parties. The Delaware Supreme Court reaffirmed that, without further evidence, the fact that there were rational differences in claim valuations does not lead to an inference of bad faith. The dissent would have sent the question of bad faith to a jury because the record demonstrated that the insurer never made an offer within the ranges it had placed on the value of the insured’s injury. As a practice tip, insurers and their attorneys are advised to make sure changes in claim valuations have rational and documented bases. Further, the dissent makes clear that some jurists will require offers from an insurer to be within the value range insurers have placed in an insured’s claim in order to avoid an inference of bad faith.

 

Case Law Alerts, 1st Quarter, January 2017. Case Law Alerts is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2017 Marshall Dennehey Warner Coleman & Goggin, all rights reserved. This article may not be reprinted without the express written permission of our firm.

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