Iowa Court Affirms Directed Verdict on Bad Faith Failure to Settle Supplemental Mold Claim

DES MOINES, Iowa - In a case involving coverage for supplemental mold contamination of a water-damaged home, the Iowa Appeals Court has affirmed a lower court's ruling that granted an insurer's motion for directed verdict on the bad faith portion of the complaint. Rossmanith v. Union Insurance Company of Providence and EMC Insurance Companies, a/k/a Employers Mutual Insurance Companies, No. 1-180/00-1138 (Iowa Ct. App.).

The appeals court noted in its Nov. 16 decision that the insurer had 'objectively reasonable reasons' for denying the claim in question, including concerns the claim fell under an exclusion enacted when an insured fails to …