Bad faith claims can come in many different forms, and a Pennsylvania court recently confirmed such claims can involve an insurer’s reckless conduct, not just an improper denial of a claim.

In Scheirer v. Nationwide Insurance, plaintiff Virginia Scheirer was riding a county bus when she was thrown to the floor and injured when the bus driver swerved to avoid oncoming traffic. Plaintiff had uninsured motorist coverage from Nationwide with limits up to $100,000 per person. Plaintiff notified Nationwide of her claim in July of 2011 and provided the required medical documentation in support of this claim.

In September of 2012, she demanded arbitration, which Nationwide refused.  In April of 2013, Nationwide requested a medical examination and statement under oath of the insured. In May, plaintiff sued in Monroe County, alleging that Nationwide handled her claim with excessive delay. She further amended this claim in June of 2013, alleging breach of contract and bad faith.

Nationwide sought to dismiss the bad faith claims, arguing that plaintiff could not assert bad faith without an unreasonable denial of coverage, and here there was no denial of coverage. In resolving pending summary judgment motions, the trial court ultimately ruled that there are bases for bad faith other than a denial of coverage, citing case law from Davis v. Allstate Property and Casualty Company in the Federal District Court for the Eastern District of Pennsylvania, which held that “bad faith can have various other bases, including an insurer’s lack of investigation, lack of adequate legal research concerning coverage, or failure to communicate with the insured.”

In this case, the court held that there were questions of fact as to whether the insurer had engaged in reckless conduct in respect of its investigation, legal research or communications that precluded the grant of summary judgment.

Thanks to Thalia Staikos for her contribution to this post and please write to Mike Bono for more information.