Judge Rules No Bad Faith In Insurer’s Low But Reasonable Valuation of UM/UIM Claim

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PHILADELPHIA, Aug. 17 – A Pennsylvania state court judge has granted summary judgment in favor of Travco Insurance Company, ruling that a $25,000.00 offer in a UIM claim which later ended in a $45,000.00 arbitration award was not so unreasonably low as to constitute bad faith.

In Boleslavksy v. Travco Insurance Co., Travco offered its insured $25,000.00 to settle a UIM claim in response to the insured’s  policy limits demand of $50,000.00.  After reviewing some additional information on the claim, Travco increased the valuation of the claim to $28,000.00 but did not change it’s offer in light of the policy limits demand.

The UIM case went to arbitration where the insured won an award of $45,000.00.  The insured thereafter  filed sued Travco for bad faith in the Philadelphia County Court of Common Pleas, arguing first  that insurer’s final settlement offer of $25,000 was inadequately low in light of the ultimate arbitration award, and second that Travco never notified the insured of the valuation increase.

Travco filed a motion for summary judgment, arguing that its offer and claims conduct were reasonable as a matter of law.  The Court agreed with the insurer, granted the motion and found Travco’s offer to be low but reasonable, and therefore not in bad faith.  The Court also found that Travco continued to reasonably evaluate information concerning the claim, and that offers of settlement which were made in the context of that information were not without basis.

Finally, the court ruled Travco had no obligation to increase its offer to $28,000.00 because the insured had unambiguously hewed to a policy limits demand, signaling no desire to negotiate.

Boleslavksy v. Travco Insurance Co., No. 151000886, 2017 Phila. Ct. Com. Pl. LEXIS 257 (Phila. C.C.P. Aug. 17, 2017) (Anders, J.)

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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 a quarter of a century, 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.

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