Opinion ID: 879244
Heading Depth: 2
Heading Rank: 2

Heading: Reliance on Inadmissible Evidence to Deny Fire Claim.

Text: We come now to consider whether FIG was entitled to rely on the inadmissible evidence foregoing to decline payment of the insurance proceeds and so escape the charge that it had not acted in good faith. The jury in this case has decided that on the circumstantial evidence presented to it by FIG, and the other evidence on the cause, FIG did indeed breach its duty of good faith. We hold that FIG was not entitled to rely on inadmissible evidence to deny payment of Britton's claim. It is not within the bounds of the duty of good faith between an insurer and the insured for the insurer to rely on rumor, hearsay, polygraph results or other inadmissible evidence to deny a loss under a fire insurance policy and so force the insured to court action to collect the proceeds of his claim. While an insurer may utilize inadmissible facts or evidence to develop admissible evidence, it does not act reasonably if it declines payment of an insured's claim merely upon inadmissible evidence or testimony. Chavers v. National Security Fire & Casualty Co. (Ala.1981), 405 So.2d 1, 8.