Court held that allegations regarding insurance carrier’s investigative practices was irrelevant to bad faith claim since the court had already determined that the carrier had not improperly denied coverage for the claim.

In this property damage case, the insured's property was destroyed in a fire. Travelers determined that there was no coverage for the loss because the property did not have a sprinkler system, as required by the policy. Yera argued that the policy was ambiguous and, therefore, unenforceable. In a non-precedential opinion, the Superior Court disagreed and held that the policy was unambiguous. The insured had also sued for bad faith based upon Travelers' investigative practices. The court held that, because Travelers had not improperly denied payment, the investigative practices were irrelevant to show bad faith. Bad faith, the court held, is predicated upon the fact that the claimant is ultimately determined to be entitled to payment.

Case Law Alerts, 3rd Quarter, July 2014