WHEN DOES AN INSURANCE COMPANY ACT IN BAD FAITH?
1. Inadequate Investigation The insurer has a duty to properly and adequately investigate the claim submitted by its insured and breach of this duty shows a lack of good faith. The insurer cannot merely gather those facts necessary to support its position and then stop looking. Rather, it has an affirmative duty to investigate all reasonably available sources of information. In Zoppo, the Ohio Supreme Court affirmed a bad faith verdict since “There was ample evidence to support the jury’s finding that Homestead failed to conduct an adequate investigation and was not reasonably justified in denying Zoppo’s claim.” In Staff Builders, the court found “ample evidence to sustain the jury findings of bad faith in the processing of the insurance claim of appellee. It is abundantly clear that information relevant to the claim was either reviewed by persons unskilled in its evaluation or disregarded by those who possessed such skills.” See also, Netzley v. Nationwide Mutual Insurance Co. (1971)
