The district court correctly concluded that the Baileys failed to plausibly allege that Lloyd’s demonstrated bad faith.
“As to the assessment of the field adjuster, the amended complaint includes no plausible, nonconclusory allegations that the adjuster knew, yet concealed, the true extent of the damages,” the judges said.
4th Circuit NC Homeowners Coverage Suit : Panel’s Ruling
While the Lloyd’s adjuster’s assessment may have been wrong, the panel noted that an honest disagreement or mistake does not constitute bad faith. Nor does Lloyd’s alleged disregard of a statement from the North Carolina Department of Insurance saying beach properties required more invasive inspections, the panel said.
The underwriters “can hardly be said to have acted in bad faith by refusing to pay appellants’ demand when the appraisal panel awarded appellants less than half of what they demanded,” the panel said. Further, Lloyd’s “willingness to provide supplemental payments above the initial assessed damage shows its good faith in the execution of the insurance contract.”
