Vera Smith purchased a policy from Penn Treaty which promised her that she and her family would be protected from her medical costs as she aged. Penn Treaty promises that your “home” is “your personal residence, whether it be in a private dwelling, a home for the retired or aged, or a residential care facility”. In 2000 she upgraded her policy, but many benefits were dropped from her old plan. As Vera became older and battling Alzheimer’s, she was forced to move in with her daughter. Her daughter built an add on, which was handicap accessible and called Penn Treaty to let them know of the change of address. However, Penn Treaty did not accept this living arrangement because it was not the policy’s definition of “home.” Vera’s daughter sent in pictures of the home addition and receipts for the lease her mother paid her each month (which she signed being power of attorney for her mother). But Penn Treaty still did not accept this, saying that they did not accept anything signed by another person besides Vera. Penn Treaty continued to deny benefits but Vera’s daughter remained persistent, filing a bad-faith complaint in state court which the insurer finally settled.

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