WPI 320.04 Insurer's Failure to Act in Good Faith—Denial of First-Party Claims

Use this instruction when an insurance company is being sued by an insured for a bad faith refusal to pay a claim.

The instruction should be incorporated at the end of WPI 320.02 (Insurer's Duty of Good Faith—General Duty), which more generally describes the insurer's duty. If not incorporated into WPI 320.02 (Insurer's Duty of Good Faith—General Duty), the instruction above should begin with a statement that the insurer has a duty to act in good faith when dealing with its insured.

This instruction is based on the language in Industrial Indem. Co. v. Kallevig, 114 Wn.2d 907, 792 P.2d 520 (1990).

The court in Kallevig specifically limited its holding to first-party claims, i.e., claims by named insureds against their insurers for coverage. The instruction in Kallevig stated that “an insurer must make a good faith investigation ….” Industrial Indem. Co. v. Kallevig, 114 Wn.2d at 917 (emphasis added). The pattern instruction uses “reasonable” instead of “good faith” to avoid circular reasoning.

Single violations of the claims handling responsibilities of insurers pursuant to RCW 48.30.010 and WAC 284-30-330 constitute per se unfair trade practices by virtue of RCW 19.86.170. Industrial Indem. Co. Kallevig, 114 Wn.2d at 925. See also the discussion in WPI 320.00 (Introduction).

Cases involving bad faith denial of coverage claims include: Am. States Ins. Co. v. Symes of Silverdale, Inc., 150 Wn.2d 462, 78 P.3d 1266 (2003) (denial of coverage due to suspected arson by insured); Ellwein v. Hartford Acc. & Ins. Co., 142 Wn.2d 766, 15 P.3d 640 (2001) (automobile insurer litigated in bad faith by misappropriating insured's expert witness and making low settlement offers), overruled on other grounds in Smith v. Safeco Ins. Co., 150 Wn.2d 478, 78 P.3d 1274 (2003); see also Coventry Assocs. v. Am. States Ins. Co., 136 Wn.2d 269, 961 P.2d 933 (1998) (property insurer may be liable for bad faith investigation into coverage issues even if coverage was properly denied); Industrial Indem. Co. v. Kallevig, 114 Wn.2d 907, 792 P.2d 520 (1990) (denial of fire insurance coverage because insurer suspected insured set fire); and Fortson-Kemmerer v. Allstate Ins. Co., 198 Wn.App. 387, 394–95, 398 P.3d 849 (2017), petition for review denied 189 Wn.2d 1039 (2018).