Joe's homeowner's insurance denied a claim for damage to his floors because the insurer reasonably believed that the damage came from a flood,which was not covered.It later turned out the problem was caused by wind damage,which was covered.Is Joe entitled to punitive damages due to the initial denial of his claim?

Question

Quizplus · Accepted Answer

Punitive damages are not allowed,however,when the insurer's breach of contract consisted of a good faith (though erroneous)denial of the insured's claim.However,there is a trend towards allowing punitive damages when an insurer's breach is in bad faith.

Joe's Homeowner's Insurance Denied a Claim for Damage to His