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Use of More Than One Adjuster Not Bad Faith By Insurer
Description Arkansas high court held that the use of more than one adjuster to review damages to a home was not evidence to support a finding of a tort of bad faith by the insurer. However, it was for the jury to decide if the insurer or home owner was right about the value of the damages suffered.
Topic Insurance
Key Words Bad Faith; Multiple Adjusters
C A S E   S U M M A R Y
Facts The Swaim's home was damaged in a tornado. After adjusters examined the house, they were paid about $40,000. Later they filed a claim for $32,000 for more damage that had not been seen before. Another adjuster was sent, he approved payment of $20,000 for the additional damage. The Swaims sued the insurer for the tort of bad faith and for breach of contract. The jury awarded the Swaims $28,500 for breach of contract and $4,000 for bad faith. Insurer appealed.
Decision Reversed in part. The fact that the insurer used more than one adjuster is not bad faith. The tort of bad faith requires dishonest, malicious or oppressive conduct in order to avoid a just obligation to an insured. That did not happen here. There can be honest disagreement about the extent of damage. There was dispute over the extent of damage; it was up to the jury to decide the evidence on that point, so its judgment stands on breach of contract.
Citation State Auto Property and Casualty Insurance Co. v. Swaim, 991 S.E.2d 555 (Sup. Ct., Ark., 1999)

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