In Cohan v. Provident Life & Acc. Ins. Co., 140 F.Supp.3d 1063, page numbers to be provided by Westlaw (D. Nev. 2015), a federal District Judge held that a genuine dispute over coverage under a disability insurance policy was a good defense to claims alleged under an unspecified "unfair trade practices" act:
Unum argues that, pursuant to the genuine dispute doctrine, its handling of Cohan's claim cannot be considered either to have been in bad faith or an unfair trade practice. A claim for bad faith must fail if a genuine dispute exists whether an insured is covered under a policy. (Citation omitted.) At issue is not whether the insured was covered under the policy, but only whether a reasonable and legitimate dispute exists as to that coverage. In the context of the facts of the present case, the existence of a genuine dispute also requires dismissal of an unfair trade practices claim.
[Emphasis added.]
It is interesting to note that, as described by the carrier and by the federal judge in this Nevada case, whether a genuine dispute exists over coverage is not merely a "defense;" it is a "doctrine."
Please Read The Disclaimer. ©2016 by Dennis J. Wall, author of Litigation and Prevention of Insurer Bad Faith (3d ed. Thomson Reuters West in 2 Volumes, with Supplements). See in particular Volume 2, § 11:17, "Fairly or reasonably debatable [first-party] claims." You are invited to visit the author's website here. All rights reserved.
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