Plaintiffs suing insurance companies for failing to pay coverage should not be held to a heightened pleading standard in which policyholders are required to show how their alleged consequential damages were reasonable and foreseeable, a state appeals court found.

A panel of the Appellate Division, First Department rejected an argument by National Union Fire Insurance Co. of Pittsburgh, a subsidiary American International Group, that a property owner that filed a claim for a damaged building in Manhattan should be held to a heightened pleading standard to bring a bad faith allegation in a lawsuit, an argument that insurance companies make often that has had success in the courts, according to the attorneys for the plaintiff.    

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