"first party” bad faith

Bad-faith claims against an insurer open the door to many more issues, and a lot more discovery about those issues, than insurers would lead you to believe. Insurers routinely clam up about anything in any of their files — even ones related directly to an insured’s claim — the moment the insured drags the insurer into court. My colleague, Kyle Sturm, recently posted an article here about a pending decision by the Oregon Supreme Court regarding an insurer’s attempt to bury its claims file.

But the claims file, the insurer’s correspondence, reports, and notes about a particular claim, tells only part of the story. That is, these documents will show an insured how he was mistreated by the adjusters. Another rich source of information powering bad-faith claims lies in what the adjusters were supposed to do, what the insurer’s own procedures and training manuals dictate should be done in handling a claim.
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A recent opinion from the Arizona Court of Appeals demonstrates the importance of being aware of varying states’ insurance laws. In Callies v. United Heritage Prop. & Cas. Ins. Co. (Mar. 18, 2014), the insureds, a husband and wife who lived in Oregon, were in the middle of a move to Arizona when their moving van and all of its contents were stolen. Their homeowner’s policy covered theft of personal property “while it was anywhere in the world.” At first, the insurer accepted coverage, leading the insureds to believe that only the valuation of their belongings stood between them and recovering for their loss. 
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