Insurer did not act in bad faith by making offer below policy limits where there were legitimate issues regarding insured’s entitlement.

This case arose from a vehicle accident in which the deceased was killed while walking along the side of the road. The subject policy included uninsured motorist coverage for family members residing with the plaintiff (the deceased’s mother and Administratrix of his estate). The United States District Court for the Eastern District of Pennsylvania granted summary judgment in favor of the insurance company and found the insurer did not act in bad faith by offering less than 25% of the plaintiff’s claim. There was evidence that the deceased did not reside with the plaintiff at the time of the accident and, therefore, no reasonable jury could conclude the insurer acted in bad faith.

Case Law Alert, 1st Qtr 2012