Insurance Bad Faith
Insurance bad faith litigation involves a lawsuit by an individual against his own insurance carrier arising out of the relationship created between the insured individual and his insurance company through an insurance policy issued by the insurance company. In Pennsylvania, bad faith insurance claims are generally governed by a Statute found at 42 Pa. C.S. Section 8371, and by case law interpreting that Statute.
Under Pennsylvania law, an insurer’s duty of good faith is contractual and arises because the insurer assumes fiduciary status by virtue of the insurance policy’s provisions which give it a right to handle claims and control settlement on the insured’s behalf. An insurer engages in bad faith under Pennsylvania law through (1) a frivolous or unfounded refusal to pay, (2) a failure to investigate into the facts of a claim, or (3) a failure to communicate with the insured. To recover for bad faith of an insurer under Pennsylvania law, the plaintiff must satisfy a two-prong test: (1) The insurer did not have a reasonable basis for denying coverage; (2) the insurer knew or recklessly disregarded its lack of a reasonable basis when it denied coverage. Bad faith can involve the failure to provide a defense to an insured individual, a refusal to pay a claim, delay in paying a claim, or misconduct by the insurance company during the pendency of litigation, i.e., the use of litigation in a bad faith effort to evade a duty owed it under an insurance policy.
If an insurance carrier is found to have acted in bad faith toward its own insured, in addition to receiving the fair value of the insured’s claim for damages, the insured may also receive an award of interest on the amount of the claim from the date that the claim was made by the insured in an amount equal to the prime rate of interest plus 3%, an award of punitive damages against the insurance carrier, and an award of court costs and attorney’s fees against the insurance carrier.
If you feel that you have been unfairly treated by your insurance carrier on any type of claim, automobile accident, slip and fall accident, life insurance claim, health insurance claim, etc., you may have a claim against your insurance carrier for bad faith damages. Please contact us and come in to talk to us about your claim.
If you have any questions concerning insurance bad faith, contact Needle Law at (570) 344-1266.
At Needle Law we handle cases involving Insurance Bad Faith in Scranton, Wilkes-Barre, Stroudsburg, Honesdale, Tunkhannock, Montrose, Milford and all of Lackawanna, Luzerne, Monroe, Pike, Susquehanna, Wayne and Wyoming Counties.