A homeowner’s policy contained two provisions for payments should the house be damaged or destroyed. One provision called for policy limits to be paid upon damage or destruction of the homeowner’s home. By endorsement, the policy called for payment of an additional 50% when the homeowner provided evidence the home was being rebuilt. The insured home was destroyed in a fire and the homeowner filed a claim for the maximum amount due under the policy. The insurance company paid the homeowner the policy’s stated limits. The homeowner began rebuilding his home, and then made a claim on the insurer for the building structure reimbursement provided by endorsement. With evidence of a rebuild, the insurance company paid the homeowner the additional 50% of limits due under the endorsement. The homeowner then sought to collect a punitive money award against the insurance company, claiming the insurance company acted in bad faith by not paying out all amounts due under the insurance policy at the time the homeowner’s home was destroyed. The insurance company claimed they had acted in good faith and were not liable for punitive amounts since they paid the homeowner the full amount due under the policy limit at the time of the home’s destruction and the additional amount when the homeowner provided evidence of a rebuild. A California court of appeals held an insurance company that pays out the amount of the policy limit but not the full amount due under endorsements at the time of destruction of a homeowner’s home is not liable for a punitive money award since insurance policy limits as defined under the insurance code do not require additional coverage by endorsement to be paid out at the time of a property’s destruction. [Minich v. Allstate Insurance Company (2011) 193 CA4th 477]
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