When you purchase an insurance policy, you enter into a contract. You agree to pay your premiums, and in return, your insurance company agrees to act in good faith, providing coverage and support when you need it most. Unfortunately, this isn’t always what happens. Dealing with the aftermath of a personal injury or property damage is already stressful. When your own insurance company adds to that burden through unfair practices, it can feel like a profound betrayal.
This situation is more than poor customer service; it may constitute “bad faith.” Pennsylvania law provides a way for policyholders to fight back and hold their insurance carriers accountable for these wrongful actions. Understanding what constitutes a bad faith insurance claim and knowing the steps to take are crucial for protecting your rights.
Lenahan & Dempsey, P.C. will explain what a bad faith insurance claim is in Pennsylvania, provide examples of bad faith actions, and outline how you can seek justice. If you believe your insurer is treating you unfairly, you have options, and getting the right legal help can make all the difference.
What Is a Bad Faith Insurance Claim?
In Pennsylvania, an insurance company has a legal duty to act in good faith and deal fairly with its policyholders. A bad-faith insurance claim arises when an insurer fails to meet this obligation without a reasonable basis.
The legal standard for proving a bad faith insurance claim is defined under Pennsylvania statute 42 Pa.C.S.A. § 8371. To succeed in a bad faith claim, the policyholder must prove two key elements:
- The insurer did not have a reasonable basis for denying benefits under the policy. This means the company’s decision to deny, delay, or underpay your claim was not based on a legitimate or honest assessment of the facts and policy terms.
- The insurer knew or recklessly disregarded its lack of a reasonable basis. This element focuses on the insurer’s mindset. It requires showing that the company was aware it was acting improperly or was so careless in its investigation and decision-making that it amounted to a reckless disregard for your rights.
Successfully proving both these points is essential. It’s not enough for the insurance company to be wrong; you must show their conduct was unreasonable and that they were aware of it. This is why these cases can be complex and often require the guidance of an experienced attorney.
Common Examples of Insurance Bad Faith
Bad faith can manifest in many ways. While every case is unique, certain actions by insurance companies frequently trigger bad faith claims. Recognizing these red flags is the first step toward protecting yourself.
Here are some common examples of bad faith conduct:
- Unreasonable Delays: The insurance company takes an excessively long time to investigate, process, or pay a valid claim without providing a legitimate reason.
- Inadequate Investigation: The insurer fails to conduct a full and fair investigation into the claim. This could involve ignoring evidence you provide, not interviewing key witnesses, or refusing to consult with relevant professionals.
- Denying a Claim Without Reason: The company denies your claim without explaining why or providing a basis in your policy language for the denial.
- Misrepresenting Policy Terms: The insurer deliberately misinterprets or misrepresents the terms of your policy to avoid paying a claim.
- Making Lowball Settlement Offers: The company offers a settlement amount that is significantly less than what the claim is reasonably worth, hoping you will accept it out of desperation.
- Failing to Communicate: The insurer does not respond to your calls or emails on time or fails to provide updates on the status of your claim.
- Threatening the Policyholder: Using intimidating tactics or making unwarranted threats to discourage you from pursuing your claim.
If you are experiencing any of these behaviors from your insurance company, it’s a strong indicator that you may have grounds for a bad faith insurance claim.
The Importance of Legal Counsel
While you can take these initial steps on your own, navigating a bad-faith insurance claim is incredibly challenging. Insurance companies have vast resources and teams of lawyers dedicated to protecting their bottom line. They are professionals at finding ways to minimize or deny claims.
Consulting with an attorney who is skilled in bad faith insurance claims levels the playing field. An experienced lawyer can:
- Evaluate the strength of your case.
- Handle all communications with the insurance company.
- Gather the necessary evidence to prove bad faith.
- Negotiate for a fair settlement on your behalf.
- File a lawsuit and represent you in court if necessary.
Having a knowledgeable attorney sends a clear message to the insurance company that you are serious about protecting your rights.
Our Firm Will Fight For You
Insurance bad-faith cases are frustrating and stressful. Our firm understands the physical, emotional, and financial toll that a personal injury or property damage claim takes, and we know that mistreatment by your own insurance company only compounds that suffering. We have a long and successful history of holding insurance giants accountable.
Our dedication to protecting the rights of the injured has earned our attorneys significant recognition. Attorney Timothy Lenahan was named by Best Lawyers in America as the Insurance Lawyer of the Year for 2024-2025 for the region of Northeastern/Central Pennsylvania and the Pocono Mountains. He is also a past recipient of the Best Lawyers in America Personal Injury Lawyer of the Year award for his tireless work on behalf of injured people.
Our firm’s success in winning hundreds and hundreds of millions of dollars for our clients has led to our inclusion in The Best Law Firms in America, where we are rated as a Tier 1 law firm—the highest rating possible. Furthermore, eight of our lawyers have been named to both Best Lawyers in America and Pennsylvania Super Lawyers. Three of our attorneys, John R. Lenahan, Jr., Timothy Lenahan, and Matthew Dempsey, have been distinguished as among The Top 100 Lawyers in Pennsylvania, an honor bestowed upon a select few out of over 48,000 lawyers in the state.
When you are fighting an insurance company, you need a team with proven experience and a reputation for success.
Contact Us For a Free Consultation
If you believe your insurance company is acting in bad faith, don’t wait. Your rights and the compensation you deserve are on the line. Contact our firm today for a free, no-obligation consultation. Let our experienced team review your case and help you understand your legal options. We are here to fight for you.
