McCormick

Appellant filed an action for declaratory relief and damages for insurance bad faith. After an adverse compulsory arbitration hearing, appellant requested a trial de novo. He challenges both an order denying postarbitration discovery and an order granting the insurer’s motion for summary judgment. We affirm the first order and reverse the latter.

The order granting summary judgment raises a significant question about the scope of an insurer’s duty of good faith. In this connection we hold an insurer’s duty is not necessarily excused where an item of information is omitted from a claim form. We also hold where there is such an omission the insurer’s duty may, in some circumstances, include a responsibility to conduct an independent investigation of the insured’s claim for benefits. Finally, we reject the contention a finding of bad faith is precluded simply because the insurer unduly delays paying benefits rather than denying them outright.

I. Statement of Facts and Proceedings Below

In July of 1976 appellant, Leroy McCormick, borrowed money from Enesco Federal Credit Union (the credit union) to buy a pickup truck and camper. Loan payments were to be made by payroll…