Judge Rules DWI Victims Adequately State Bad Faith Claim Against Progressive

PHILADELPHIA, Feb. 4 – U.S. District Judge Timothy J. Savage has denied a motion to dismiss filed by Progressive Insurance Company in response to a bad faith complaint filed by Progressive insureds Jeffrey and Aimee Kelly arising out of a UM/UIM claim.    The Court did dismiss, however, claims the Kellys made against progressive under the Pa. Unfair Trade Practices and Consumer Protection Law.

The Kellys were injured in 2010 when their vehicle was struck from behind by a drunk driver.  They settled with the drunk driver for the driver’s policy limits, and then filed a UM/UIM claim with their own carrier, Progressive.  Progressive denied the claim, and the Kelly’s filed suit.

The Judge stated succinctly:

The Kellys allege that Progressive failed to pay their claims, make a reasonable settlement offer, investigate their claims properly, and consider medical and other documentation. These allegations suffice to state a claim under § 8371… The insurance bad faith statute applies to post-contract formation conduct. The UTPCPL, on the other hand, applies to conduct surrounding  the insurer’s pre-formation conduct.  The UTPCPL applies to the sale of an insurance policy.  It does not apply to the handling of insurance claims.

Kelly v. Progressive Advanced Ins. Co., (E.D. Pa. Feb. 4, 2016)(Savage, J.)

Author: CJ Haddick

C.J. Haddick is a Director with the law firm of Dickie, McCamey, & Chilcote, PC, based in Pittsburgh, Pa. He has advised and represented insurers in insurance coverage and bad faith litigation for more than three decades, and written and spoken throughout the United States on insurance coverage and bad faith prevention and litigation. He is Managing Director of the firm's Harrisburg, Pa. office. Reach him at chaddick@dmclaw.com or 717-731-4800. View all posts by CJ Haddick