Man discussing over insurance policies

Cases involving bad faith claims are becoming greater in Pennsylvania. Bad faith for insurance providers means that they refuse to pay claims when they should. For instance, if you are involved in a motor accident and your insurance provider does not handle your claim properly or denies it immediately, this is possibly bad faith.

According to law.com, cases of bad faith claims are increasing in Pennsylvania. Ask counsels on both sides of the cases, and you’ll likely receive different explanations. Those on the defense side say it is mere tactics by plaintiffs to force insurances to honor claims. On the other side, plaintiffs’ counsels say insurances are reneging on the obligations.

What is insurance bad faith?

Getting an insurance cover is often considered the surest way to protect against harm from specified events in the future. Getting covered is often a gruesome process involving analysis of your financial situation, a health exam in case of health insurance, and so on. But sometimes getting covered is the easier part, and getting paid what you are owed herculean.

Insurance providers have a legal duty to deal honestly and fairly with their clients. This means not misleading clients or withholding vital information. Basically, bad faith is when insurance uses tactics to avoid paying claims it should. Bad faith cases come in various forms and can apply to all types of insurance. Examples of bad faith acts by insurance providers include:

  • Misrepresenting the details of an insurance contract so they won’t pay a claim
  • Refusing to pay a legitimate claim
  • Not informing potential clients on policy exclusions and limitations before they purchase a cover.
  • Refusing to provide coverage without any reason
  • Not investigating a claim appropriately or denying a claim without any investigation or legal explanation.
  • Applying a standard that differs greatly from that set by the industry
  • Withholding or delaying payments on purpose or without good reason

An insurance provider may also act in bad faith if they fail to investigate, deny, or confirm coverage, deny or pay a claim within a reasonable period.

However, cases involving simple mistakes are not acts of bad faith. Your disagreement with the insurance adjuster over the loss amount is also not bad faith as long as they have a reasonable explanation for their results.

But if an insurance investigator ignores evidence backing your claim and only looks for evidence backing the insurance provider’s basis for not paying the claim, that is bad faith.

How to fight bad faith from insurance providers

If you suspect bad faith, you are not without a legal option. An insurance attorney can help you deal with dishonest insurance providers. Under the Pennsylvania insurance bad faith statute, if a court finds the insurance actions to constitute bad faith, it is permitted to do the following:

  • Award interest to plaintiff’s claim from the date it was made. The interest is equal to the prime rate of interest plus an additional 3 percent.
  • Order the provider to pay the plaintiff punitive damages
  • Assess attorney expenses and court costs against the provider

An insurance attorney can help you get all these. Sometimes insurance companies won’t budge until you sue them. Other times, it may not get to that; just a letter from an attorney is enough to get them to honor their contractual obligation.

An insurance attorney can help:

  • Deal with denials and delays
  • Gain a better understanding of your insurance policy
  • Calculate the fair amount you are owed
  • Sue, an insurance company for interest on the claim and punitive damages

For example, in a recent case involving water damage insurance, the court found in favor of the plaintiff that their insurance provider obviously underestimated the amount of damage and extremely underpaid the claim, which involved water damage containing pollutants. The plaintiff filed that the provider’s approximations for repairs did not align with the construction and insurance industry’s practice; specifically, the insurance failed to provide money to remove and replace damaged areas.

The defense side argued the plaintiff’s case relied on compulsory statements only without actual evidence, but the court ruled in favor of the insured. The court found the notice of pollutants, violations of industry custom for remediation, and information that the approximated repairs and final payment did not align with standards set by the Institute of Inspection Cleaning and Restoration were enough evidence.

If you ever find yourself in cases like this involving acts of bad faith, contact Stambaugh Law Personal Injury Attorney. We work hard to ensure your rights are protected. Don’t suffer alone. Call us today for a free consultation about your insurance worries.

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