What Is Insurance Bad Faith?

Our practice at Roda Law emphasizes insurance law because we strongly believe that insurance companies must act fairly and reasonably in handling claims and providing compensation for their policyholders. This is the simple premise of insurance “bad faith” law: insurance companies must act “reasonably” in handling claims.

In certain types of insurance lawsuits in Pennsylvania, showing that the insurance company has acted unreasonably is all that has to be proven in a bad faith case. In other bad faith cases, a second element to be shown is that the insurance company either knew that it was acting unreasonably or “recklessly disregarded” that it was acting unreasonably. Our insurance law attorneys can tell you what has to be proven in your case.

What kinds of conduct can constitute “bad faith?”

Bad faith can occur in a variety of ways. An insurer may act in bad faith by:

  • taking an unreasonable amount of time to acknowledge a claim when it is received, or failing to acknowledge the claim at all
  • failing to respond promptly to communications, or failing to respond at all
  • unreasonably denying that a claim is covered under an insurance policy
  • unreasonably refusing to offer any payment on a claim
  • offering an amount that is unreasonably low
  • taking unreasonably long to investigate, evaluate, and pay a claim
  • making unreasonable demands in the investigation of a claim, such as asking for the same records over and over
  • unreasonably refusing to settle a liability claim (or lawsuit) against its insured, and thereby risking the insured’s personal assets
  • making misrepresentations during the investigation of a claim
  • making unreasonable accusations against an insured, such as unreasonably accusing him or her of arson
  • unreasonably threatening or filing a lawsuit (often called a “declaratory judgment” case) against an insured to avoid paying a claim; or
  • forcing its insured to file a lawsuit, or go to arbitration, to get a claim paid

If you believe your insurance company is guilty of one or more of the above actions, talk to one of our insurance attorneys about your case.  We offer free initial consultations to help you determine if you have a valid lawsuit, and will work with you every step of the way to help you receive the compensation you deserve.

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