PA Auto Insurance Dispute Attorneys & Insurance Lawyers Near You
You may assume that because both you and the at-fault driver are insured, the aftermath of your accident should be straightforward. Unfortunately, many Pennsylvania residents quickly discover that insurance companies often prioritize minimizing payouts over honoring valid claims. You might experience delays in the settlement process or receive a settlement offer that undervalues the full extent of your damages. These tactics are not uncommon—insurance adjusters may act in bad faith by dragging out claims, disputing facts, or offering insufficient compensation. In such situations, working with an experienced insurance dispute attorney in Pennsylvania can be a strategic move. A lawyer who understands the insurance landscape can advocate for your rights, challenge unfair settlement practices, and help ensure you receive the full compensation you’re entitled to under your policy.
Aren’t All Insurance Companies Required to Pay Claims in PA?
Insurance companies, like any for-profit business, are driven by the bottom line. While they are legally obligated to pay valid claims, they often employ tactics designed to reduce or avoid payouts altogether. This can include questioning liability by suggesting you were partially at fault for the accident, underestimating damages, or interpreting policy language in a way that favors denial. These strategies aren’t accidental—they’re part of a broader effort to minimize financial exposure. In many cases, what starts as a legitimate claim turns into a prolonged negotiation or dispute. That’s where having a Pennsylvania insurance dispute attorney by your side becomes essential. A skilled lawyer signals to the insurer that you’re serious about asserting your rights and unwilling to accept a lowball offer. With legal representation, insurers are more likely to handle your claim with the attention and fairness it deserves.
Bad Faith Insurance Companies: Why You Need a Pennsylvania Insurance Claims Lawyer Near You
Insurance companies in Pennsylvania are legally required to act in good faith when handling claims, meaning they must fulfill the obligations outlined in their policy agreements with honesty and fairness. Pennsylvania stands out from many other states because it provides a statutory remedy for policyholders who believe their insurance company has acted in bad faith. Under 42 Pa.C.S. § 8371, enacted in 1990, individuals can file a private legal action against an insurer for misconduct in handling first-party claims. If a court finds that an insurance provider engaged in bad faith conduct—such as unjustified delays, lowball offers, or wrongful denials—it may impose serious penalties. These include interest on the claim amount, court costs, attorney fees, and punitive damages designed to hold the insurer accountable.
While the statute doesn’t offer a precise definition of “bad faith,” Pennsylvania courts have developed a well-recognized standard. To prove bad faith, claimants must demonstrate two things: first, that the insurer lacked a reasonable basis for denying the benefits under the policy; and second, that the insurer knew—or recklessly disregarded—the fact that it had no reasonable grounds to do so. This legal framework empowers policyholders to take action when they are met with unfair or abusive insurance practices.
What Constitutes Bad Faith on an Insurance Company’s Part?
When you purchase insurance—whether it’s for your vehicle, home, or personal health—you do so with the expectation that the policy will protect you when an unexpected event occurs. You’ve upheld your end of the agreement by consistently paying premiums, trusting that your insurer will provide the necessary support if disaster strikes. However, many policyholders in Pennsylvania are surprised to discover that their claims are met with resistance. Instead of prompt assistance, you may encounter delays, partial claim approvals, or complete denials without clear justification. These tactics often reflect more than just inefficiency—they may indicate the insurance company is not acting in good faith. By selectively approving portions of a claim or manufacturing reasons to deny it altogether, insurers may be engaging in bad faith conduct, potentially violating the legal obligations outlined in your policy. In some cases, these actions may even cross into unlawful territory, making it crucial to consult with a legal professional if your claim is being unfairly handled.
Examples of Bad Faith Practices By Insurance Companies
Bad faith conduct by insurance companies can take many forms, often designed to delay, diminish, or deny a valid claim. Recognizing these tactics is the first step in protecting your rights as a policyholder. Some of the most frequent examples of bad faith practices in Pennsylvania include:
- Unreasonably delaying the processing or investigation of your claim
- Failing to provide a clear or lawful reason for denying your claim
- Conducting a superficial or incomplete investigation into the facts
- Delaying the collection or review of critical evidence
- Overlooking or disregarding documentation that supports your case
- Refusing to defend you in a lawsuit covered under your liability policy
- Threatening or intimidating communication toward the claimant
- Failing to make any offer, even when liability is clear
- Making a settlement offer that is far below the claim’s actual value
- Exploiting vague or technical policy language to justify a denial
- Misrepresenting policy terms or coverage limits
- Ignoring your communications or failing to provide timely updates on your claim
- Deviating from recognized standards in the insurance industry when handling claims
If you recognize any of these behaviors in your insurer’s handling of your case, it may be time to consult with a knowledgeable insurance claim attorney. An experienced Philadelphia insurance bad faith lawyer can help assess your situation and determine whether legal action is appropriate to recover the compensation you rightfully deserve.
Two-Part Test for Determining Bad Faith
While the statute, 42 Pa.C.S.A. § 8371, governing bad faith insurance in Pennsylvania is not specific on what bad faith is or how a claimant can prove the insurance company acted in bad faith, a test was created by the Pennsylvania Supreme Court for the case of Rancosky v. Wash Nat’l Ins. Co., 170 A.3d 364, 376 (Pa. 2017) that can help.
The claimant must have clear proof that the insurance company acted unreasonably in denying the policy claim.
Also, the claimant has to show that the insurance company knew that the company was acting unreasonably.
You’ll want to keep all of your insurance documentation, any police reports regarding the event, and any communications from the insurance company to assist you in your bad-faith claim. Speaking with an experienced Philadelphia insurance bad faith lawyer who understands best practices on bad faith insurance claims can help you determine whether or not a claim is possible in your case.
What Happens if the Insurance Company Is Found to Have Acted in Bad Faith?
When a court determines that an insurance company has engaged in bad faith practices, several legal remedies may be available to the claimant. In addition to being entitled to the original amount of the claim, the claimant may also receive interest on the claim’s value, calculated at the prime interest rate plus 3%. This serves as an added incentive for insurers to act fairly and promptly.
Moreover, the court may impose punitive damages. These damages are intended to penalize the insurer for its wrongful actions and deter similar behavior in the future. The court can also require the insurer to pay court costs and the claimant’s attorney fees, further ensuring that the insurer bears the full financial burden of its bad faith actions.
These remedies not only provide compensation for the policyholder’s losses but also send a strong message that bad faith behavior will have serious financial consequences.
Do You Need an Insurance Dispute Lawyer in PA?
Reach out to us today. You may not realize that you need an insurance dispute lawyer in Pennsylvania to help you secure the compensation you’re entitled to, especially if personal injuries are involved. Many individuals are unaware of how challenging it can be to get their claims approved and fully paid out. Having a skilled attorney on your side can make a significant difference. An experienced legal team, well-versed in negotiating and litigating against insurance companies, understands the tactics insurers use to minimize or avoid paying a fair settlement after an accident. They know how to identify these tactics and effectively combat them to ensure you receive the payment you deserve.
If you’ve suffered an injury and need a Pennsylvania insurance claims lawyer, the experienced legal team at The Pearce Law Firm, Personal Injury & Accident Lawyers, is ready to help. Whether you need a lawyer to sue your car insurance company or are seeking general auto insurance legal advice, our extensive experience working with insurance companies can assist you in getting your claim paid. If you’re dealing with a car accident claim in Doylestown, PA, or surrounding areas, contact us today to discuss the difficulties you’re facing with your insurance dispute. Our team will review your situation, explore your options, and determine the best path forward based on the specifics of your case.
