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Sampson v. American Standard Insurance Co.7/29/1998
ning whether insured had any residual disability when the accident for which insured sought benefits occurred).
The fact that Dr. Illingworth and Dr. Milas opined that Sampson's diagnosis of a syrinx or cavity in her spinal cord and associated physical complaints were caused by the accident did not make American Standard automatically obligated to pay Sampson the full limits of coverage available under the policy. This is because " n insurance company is not obligated to disregard the opinion of its own expert in favor of the insured's expert's opinion." Morgan, 534 N.W.2d at 97.
2. We believe that American Standard reasonably declined to honor Sampson's settlement demand for the full limits of UM and medical coverage until it had a chance to fully investigate the claim. Cf. Dolan, 431 N.W.2d at 794 (insured had right to depose plaintiff-insured and his physician before offering settlement amount). This fact is important because an insurer has a right to conduct an investigation concerning claims made by its insured. See Hoekstra v. Farm Bureau Mut. Ins. Co., 382 N.W.2d 100, 111 (Iowa 1986) (insurer had right to investigate cause and origin concerning fire in insured's home); Pirkl v. Northwestern Mut. Ins. Ass'n, 348 N.W.2d 633, 635 (Iowa 1984) (in the course of investigating a claim, insurer may require the insured to present adequate proof of loss before paying the claim); Amsden v. Grinnell Mut. Reinsurance Co., 203 N.W.2d 252, 255 (Iowa 1972) (noting that insurer could not be expected to pay a loss during investigation of fire at insured's business).
We also point out that Sampson's policy expressly states that an insured must provide the insurer "with medical, employment and other records and documents we request, as often as we reasonably ask, and permit us to make copies." The policy also states that American Standard has the right to investigate claims for benefits under the UM and medical coverage provisions of the policy. Sampson thus was put on notice concerning her duty to provide records to American Standard. Sampson likewise was put on notice that American Standard would exercise its right to investigate any claims for benefits under the policy, including the right to determine whether medical bills presented by her were reasonable in amount, appropriate and necessary, and incurred because of the November 30 accident. Cf. AMCO Mut. Ins. Co. v. Lamphere, 541 N.W.2d 910, 914 (Iowa App. 1995) (insured's lack of cooperation in providing documents requested by insurer established an objectively reasonable basis for denial of coverage and plaintiff- insured thus failed to present sufficient evidence to support bad faith claim).
We also reject Sampson's contention that American Standard's investigation was inadequate. In a first-party bad faith claim, "an imperfect investigation, standing alone, is not sufficient cause for recovery if the insurer in fact has an objectively reasonable basis for denying the claim." Reuter v. State Farm Mut. Auto. Ins. Co., 469 N.W.2d 250, 254-55 (Iowa 1991); see also Hollingsworth v. Schminkey, 553 N.W.2d 591, 596 (Iowa 1996); but cf. Kooyman v. Farm Bureau Mut. Ins. Co., 315 N.W.2d 30, 35 (Iowa 1982) (failure to investigate, standing alone, may establish bad faith in third-party bad faith claim).
3. In summary, we conclude that reasonable minds would not differ in finding that Sampson's claim for benefits under the policy was fairly debatable, based on Sampson's medical records, or lack thereof, that American Standard had in its possession at the time of the settlement demand. Sampson thus failed to produce substantial evidence that American Standard lacked a reasonable basis for denying her policy limits claim. See
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