To show an insurance company has acted in “bad faith” an insured must first show that the insurance company has breached the insurance contract. This is discussed in a 2022, opinion from the Western District of Texas, San Antonio Division opinion. The opinion is styled, Rosemarie Wheeler v. Safeco Insurance Company of Indiana.
Wheeler had her home insured through Safeco. Wheeler contends her home was damaged in a hail storm that occurred on or about May 28, 2020. The claim was reported on May 30, 2020, and Safeco scheduled an inspection on June 13, 2020. The adjuster, Doug Lehr, determined that there was hail damage but that most of the damage was cosmetic. A small check was issued for the damage determined to be non-cosmetic.
Wheeler hired a public adjuster, Elvis Spoon, who prepared an estimate that totaled $140,617.62. Spoon disagreed the roof damage was cosmetic but did not provide any additional information to dispute Lehr report.
A lawsuit resulted with Wheeler filing a motion for summary judgment on her claim against Safeco for the breach of contract claim. That claim was denied and Safeco filed a motion for summary judgment on Wheeler’s bad faith claims.
Wheeler, in her lawsuit, alleges that Safeco violated various sections of Chapter 541 in the Texas Insurance Code.
Wheeler alleges that Safeco improperly investigated her insurance claim. An insurer is obligated to adequately investigate a claim before denying it. The scope of the appropriate investigation will vary with the claim’s nature and value and the complexity of the factual issues involved. An insurer does not act in bad faith
where a reasonable investigation reveals the claim is questionable. If an insurer fails to conduct a reasonable investigation, it cannot assert that a bona fide coverage dispute exists. An insurer fails to reasonably investigate a claim if the investigation is conducted as a pretext for denying the claim. An insurer’s reliance on an expert’s report will not support a finding of bad faith unless there is evidence that the report was not objectively prepared or the insurer’s reliance on
the report was unreasonable.
Wheeler argues that reasonableness is ordinarily an issue of fact, and therefore her extra-contractual claims are not subject to summary judgment. However, a Court may still decide a bad faith claim as a matter of law if there is no conflict in evidence. Texas courts regularly determine on summary judgment whether a fact dispute exists as to the insurer’s denial of coverage. Thus, Wheeler’s argument that her extra-contractual claims are not within the ambit of summary judgment is unavailing.
The Court then discussed the evidence in the case and the report by Safeco’s expert and denied Wheeler’s motion.