Insurance Bad Faith Law

The Duty of Good Faith and Fair Dealing

Under Pennsylvania law, your insurance company owes you a duty of good faith and fair practices. Insurance companies must pay legitimate claims properly and promptly. If they refuse, discount, or delay of payment, they can be held responsible for additional payments.

If you feel your insurance company has not been fair, Scott can help you. Determining whether a denial of benefits is unreasonable requires a thorough understanding of insurance-industry practices, as well as the company’s intent. If the company recklessly disregarded your rights as an insured, you may be able to claim of bad faith and collect additional monies.

Bad Faith Practices

The duty of good faith and fair dealing applies to every aspect of your insurance claim, from your first call until you receive your payment. Various practices may constitute bad faith. The most common include:

  • Misrepresenting the coverage you purchased
  • Misstating the facts of your case or the amount of damage
  • Failing to adequately investigate the facts that support your claim
  • Misleading you as to the amount of time you have to file claims
  • Failing to promptly respond to your communications
  • Failing to affirm or deny coverage within a prompt period of time after you have provided proof of loss to the company
  • Not giving you a fair settlement for your claims when liability is reasonably clear
  • Failing to provide you with a reasonable explanation as to why your claim has been denied in whole or in part
  • Undervaluing your claim so that you will not initiate litigation to receive a fair settlement
  • Rescinding a policy
  • Claiming that you made a misrepresentation on the policy or coverage application
  • Failing to defend you against claims brought by others
  • Advising you not to obtain the services of an attorney

Recoverable Damages

If you have a successful bad faith claim, you may be able to collect both contractual and extra-contractual damages, including the policy benefits that you were initially denied as well as additional monetary damages for both economic and noneconomic harms, such as:

  • Attorneys’ fees
  • Punitive damages
  • Interest at a higher rate than normal