A Claim for Bad Faith Must Be Plausible, Not Just Possible

Robert Hampton purchased up to $15,000 in underinsured motorist coverage from Progressive for losses incurred in 2023. Steven Vicioso caused his car to collide with Hampton’s car on March 5, 2023. Vicioso’s insurer settled with Hampton for $15,000. Hampton claimed losses in excess of the $15,000 paid by Vicioso’s insurer and, thus, sought underinsured motorist benefits for his losses not covered by Vicioso’s insurance up to the cap of $15,000 on his Progressive underinsured motorist policy. Progressive offered Hampton $1,000. As a result, Hampton sued Progressive for bad faith. To recover on a bad faith claim, a claimant is required to show by clear and convincing evidence that: (1) the defendant insurer did not have a reasonable basis for denying the policy benefits; and (2) the insurer knew or recklessly disregarded its lack of reasonable basis when it denied the claim. The court sided with Progressive, stating Hampton plead facts allowing the court to infer a possible bad faith claim, but the pleaded facts must show “not only that a ‘bad faith claim is ‘possible,’ but ‘plausible.’” 

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