Bad Faith, Punitive Damages Claims Survive in Superstorm Sandy Homeowner’s Coverage Dispute

TRENTON, N.J. — A New Jersey couple may proceed with allegations of bad faith and a request for punitive damages against an insurance company they say underpaid their claim for losses caused by Superstorm Sandy.

In an Oct. 1 decision, Judge Michael A. Shipp of the U.S. District Court for the District of New Jersey refused to dismiss the claims, citing allegations in the plaintiffs’ complaint that the insurer refused to pay the claim in full despite there being no basis whatsoever for doing so.

Judge Shipp, however, granted American Strategic Insurance Corp.’s motion to dismiss a claim for violation …