Insurance companies are always wary of fraudulent claims. On those occasions when they deny coverage, a lawsuit alleging breach of contract and bad faith is a common result. However, sometimes the evidence just overwhelmingly points toward fraud and makes the risk of litigation necessary.
In McKean v. Nationwide, plaintiffs Stephen and Michele McKean commenced suit against Nationwide for withholding insurance proceeds following a fire that burned down their home. The McKeans had insurance coverage providing for fire damage through Nationwide, and they notified the carrier in a timely manner as required by their policy. Nationwide denied coverage and argued that the Mckeans had intentionally set the fire themselves.
Nationwide’s experts, a Pennsylvania State Police fire marshal and Thomas Jones, found there were five different origins of the fire—a pile of tax documents in the kitchen, a rag between the kitchen and the front door, and the furniture in the living room. Nationwide pointed out inconsistencies in the plaintiffs’ testimony and lack of corroboration. Furthermore, the McKeans had made four prior claims for fire damage totaling more than $830,000. The McKeans had also made dozens of claims on their automobile insurance policy. The mortgage on their property was facing foreclosure, and Stephen McKean was facing multiple money judgments against him. Overall, Nationwide argued that the McKeans were approximately $1.5 million in debt at the time of the fire.
Due to the overwhelming evidence, the jury found that the plaintiffs had intentionally set the fire and subsequently committed insurance fraud. The plaintiffs contend that there are several appealable issues and are disappointed with the verdict, but the evidence, as stated, appears overwhelming.
Thanks to Eric Clendening for his contribution.