Family Wins Bad Faith Lawsuit Against Safeco
Safeco Insurance Company acted in bad faith when denying the insurance claim of a Wisconsin family whose house suffered mold and water damage, a judge has ruled following a bad faith insurance lawsuit.
During the process of purchasing their home in Milwaukee, Craig and Nancy Miller purchased an insurance policy with Safeco that covered any and all "accidental direct physical loss." The couple eventually purchased the home, and was told by a home inspector that there was only a minor “soft spot” on the roof that would cost $1,500 to repair.
However, as repairs got underway it was determined that the water damage and existence of mold was far more prevalent than had been initially reported – the seller of the house sad reported no mold or water damage upon selling the property, Courthouse News Services reported.
The Millers had been paying their insurance bill every month, and looked for Safeco to pay out on their claim so they could continue with renovations. However, Safeco denied their insurance claim on the grounds that a pre-purchase inspection report had documented water damage and therefore qualified the damages as pre-existing, and therefore not covered in the policy.
The Millers countered in their bad faith insurance lawsuit that Safeco could not fall back on the specific policy terms because it had not sent the couple information about it until after the damages were discovered.
A judge ruled that Safeco acted in bad faith in denying the Miller’s claim because it could not apply policy exclusions that it had not yet informed the policyholder of under Wisconsin law
"Allowing an insurer to take premiums 'and then deny liability based on an exclusion of which the insured was not aware because the insurance company had not informed him or her of the exclusion or given him or her the means to ascertain its existence' would be unjust," Judge John Tinder wrote in a judgment. For legal help, call (800) 581-6358.
The Millers were awarded them more than $485,000 in damages due to the bad faith insurance lawsuit.
Have you had an insurance policy improperly denied by an insurance company? Call Sokolove Law today for a free legal consultation regarding a potential bad faith lawsuit.