ERIC is the owner of commercial property located at 4600 Lancaster Avenue, Philadelphia, PA 19131 (“Subject Property” or “Property”), as well as other commercial properties in Philadelphia and Pennsylvania (“ERIC Properties”).  On or around January 25, 2012, Seneca issued Policy No. SSP1501079, an all-risk commercial property policy (“Policy”), to ERIC. A true and correct copy of the Policy is attached to this Complaint as Exhibit “A.”  The ERIC Properties, including the Subject Property, are each separately enumerated on the declarations page of the Policy.  The Subject Property’s “Limit of Insurance” is listed at $212,180.  The Policy provides for replacement cost coverage, but allows ERIC to, at its option, recover on an actual cash value (when abbreviated, “ACV”) basis.  Most pertinently to this litigation, the Policy includes a coinsurance term providing that, if the insured fails to purchase high enough limits, it must act as a co-insurer in the event of a loss. See Exhibit A, page 46.  It is well understood and accepted in the insurance industry that there will be many instances in which an insured will “do better” by recovering on an actual cash value basis than a replacement cost basis, because, where the recovery is on an actual cash value basis, the coinsurance penalty similarly calculated on actual cash value is limited or nonexistent. II.  On August 23, 2012, a motor vehicle crashed into the Property, causing it to sustain substantial damage.  ERIC notified Seneca of the loss in a timely and proper fashion, and the claim was assigned Claim No. 12HHN260 (“Claim”).  In its handling of the Claim, Seneca has breached the terms and conditions of the Policy and acted in bad faith.  Seneca determined that the replacement cost value of the Property at the time of the loss was $395,486, ERIC was required to carry limits of $356,261, and ERIC would therefore only be able to recover 59.56% of the damages it sustained.  This would only be correct if ERIC was making a claim for replacement cost value.  Other insurance companies interpret coinsurance provisions in this manner; that is, when a claim is made on actual cash value basis, the required amount of coverage to avoid a coinsurance penalty is similarly calculated on an actual cash value basis.  One reason for this, among others, is that an insured pays extra for replacement cost coverage, so presumably it is receiving more coverage not less than if the insured purchased only an actual cash value policy.  Moreover, courts have uniformly held that when an insured elects coverage under an actual cash value basis, the replacement coverage provisions are irrelevant.  On December 10, 2012, Seneca issued a letter to ERIC’s public adjuster improperly rejecting ERIC’s Claim (“December 10 Letter”). A true and correct copy of the December 10 Letter is attached to this Complaint as Exhibit “B.”  According to Seneca, “Although the policy permits the insured to submit its claim on an actual cash value basis, that option does not alter the method by which the ‘value of the covered property’ is determined for purposes of calculating coinsurance.” See Exhibit B, page 5.  This is simply untrue.  Seneca then reiterated that the replacement cost value of the Property at the time of the loss was $395,486, ERIC was required to carry limits of $356,261, and ERIC would therefore only be able to recover 59.56% of the damages it sustained. See Exhibit B, pages 5-6.  Seneca’s interpretation of its Policy is arbitrary, capricious, unreasonable, contrary to the plain language of the Policy and the reasonable expectations of its insured, and in bad faith; if such an interpretation were to stand, Seneca would in effect have been charging a higher premium to its insureds for less coverage.  On information and belief, Seneca has interpreted its policies in this manner with regard to hundreds, if not thousands, of insureds throughout the country who elected to make a claim on an ACV basis. This action is being brought as a class action under Federal Rules of Civil Procedure 23(a), 23(b)(l), 23(b)(2), and 23(b)(3), on behalf of a class (“Class”) consisting of the following: All Seneca policyholders and insureds that, following a property loss, have elected to recover on an actual cash value basis, and have been assessed a coinsurance penalty based upon the replacement cost of the property.  The Class is so numerous that joinder of all members is impracticable. See Federal Rule of Civil Procedure 23(a)(1).  The exact size of the Class and the members thereof are ascertainable through Seneca’s business records.  Common questions of law and fact exist as to all members of the Class and predominate over any questions effecting solely individual members of the Class. See Federal Rule of Civil Procedure 23(a)(2).  The Plaintiff’s claims are typical of the claims of the other members of the Class, as the Plaintiff and all other members of the Class were damaged in the same way. See Federal Rule of Civil Procedure 23(a)(3).  The Plaintiff will fairly and adequately represent the interests of the Class, and has retained counsel competent and experienced in class action litigation. See Federal Rule of Civil Procedure 23(a)(4).  The Plaintiff and its counsel are committed to vigorously pursuing this matter, and have the financial resources to do so.  The Plaintiff has no interests that are contrary to or in conflict with those of the Class.  A class action is superior to other available methods for the fair and efficient adjudication of this controversy. See Federal Rule of Civil Procedure 23(b)(3).  Since the damage suffered by individual class members may be relatively small, the expense and burden of individual litigation make it virtually impossible for the Class members individually to seek redress for the unlawful conduct alleged.  Moreover, as set forth above, common questions of law and fact exist as to all members of the Class and predominate over any questions that solely effect individual members of the Class. See id. These common questions include the question of whether Seneca’s method of calculating a coinsurance penalty is wrongful.  The Plaintiff knows of no difficulty that will be encountered in the management of this litigation that would preclude its maintenance as a class action. The Policy is a valid and enforceable contract between ERIC, on the one hand, and Seneca, on the other hand.  The members of the Class also possess (and/or possessed) valid and enforceable contracts with Seneca.  ERIC has complied with all of the applicable terms and conditions of the Policy.  The members of the Class also complied with all of the applicable terms and conditions of their contracts with Seneca.  Seneca has breached the Policy (and the policies it issued to members of the Class) by, among other things, using the irrelevant replacement cost of a property, rather than the applicable actual cash value, to calculate whether enough insurance had been purchased.  The aforesaid breach has directly and proximately caused ERIC and the members of the Class to sustain damages. The Plaintiff repeats each of the foregoing allegations as if fully set forth herein.  Seneca has no actual basis for declining full coverage to ERIC and the members of the Class.  Seneca has acted in bad faith by knowingly taking actions that lacked a reasonable basis, and frivolously and unfoundedly refusing to pay policy proceeds due and owing to policyholders, including ERIC and the members of the Class.  Seneca’s actions run contrary to 42 Pa.C.S.A. § 8371 and other applicable statutes and common law governing first-party bad faith.  This is a class action brought on behalf of the Plaintiff and all Seneca policyholders and insureds that, following a property loss, have elected to recover on an actual cash value basis, and have been assessed a “coinsurance penalty” based upon the property’s replacement cost.  I. 