Obelkevich v. Safeco Ins. Co., No. 3:18cv1111, 2019 U.S. Dist. LEXIS 103177, at *1 (M.D. Pa. June 20, 2019)

Understand how third-party vendors arrive at their estimates of destroyed personal property.

The Middle District reviewed this case involving homeowner’s insurance covering a property which suffered fire damage to its garage. The insurer retained a vendor to create an inventory of destroyed personal property. The insured’s public adjuster countered with an estimate over four times as large. The insurer issued payment consistent with its own vendor’s estimate while disregarding the competing estimate as unjustifiably high. The complaint alleged breach of contract and statutory bad faith. The insurer moved for a partial summary judgment as to bad faith. Ultimately, the bad faith count survived. The court found several pieces of information that could possibly contribute to a legitimate bad faith claim, including: (1) evidence the insurer did not know how their own vendor had arrived at the prices in their depreciation schedule; (2) the insurer’s requirement for proving loss of the items was significantly burdensome; and (3) the insurance adjuster failed to send the insured a proof of loss. It is important for a claims adjuster to be familiar and understand how a third-party vendor arrives at information set forth in their estimate.


Case Law Alerts, 4th Quarter, October 2019

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 © 2019 Marshall Dennehey Warner Coleman & Goggin, all rights reserved. This article may not be reprinted without the express written permission of our firm.