N.J. Judge Permits Bad Faith, Consumer Fraud Claims to Proceed in Superstorm Sandy Insurance Case

TRENTON, N.J. — A federal judge has refused to dismiss bad faith and consumer fraud claims brought against Allstate Insurance Co. by a New Jersey woman who alleges that her Superstorm Sandy homeowners claim was denied despite confirmation by an adjuster that the loss was caused by wind.

Judge Freda L Wolfson of the U.S. District Court for the District of New Jersey ruled Feb. 24 that the allegations surrounding Allstate’s decision to ultimately deny the claim failed to meet the “fairly debatable” standard for assessing whether an insurer’s coverage decision breached the covenant of good faith and fair dealing …