Ever wonder how an insurance company can stay in business? The math doesn’t seem like it would add up with people paying what seems like relatively low premiums, but the insurance company paying out claims that are more extensive than those same premiums. Without understanding the inner workings of an insurance company, it doesn’t seem like a sound business practice that would result in profits. Still, insurance companies do make money for themselves, their investors, and shareholders. One of the ways that insurance companies help to protect their bottom line is by denying fraudulent or inappropriate claims. What happens if your claim is denied but shouldn’t be? In some cases, insurance companies will use illegal methodologies to deny claims that should be approved. When you believe your claim has been denied on false pretenses, you can use the help of a Philadelphia insurance bad faith lawyer.
In this Guide:
- What Constitutes Bad Faith On An Insurance Company’s Part?
- Examples of Bad Faith Practices By Insurance Companies
- Two-Part Test For Determining Bad Faith
- What Happens If The Insurance Company Is Found to Have Acted In Bad Faith?
- How Can A Bad Faith Insurance Lawyer Near You Help?
What Constitutes Bad Faith On An Insurance Company’s Part?
You purchased insurance to protect you in case of a calamity, such as your home burning down or a car accident. You’ve paid your premiums, and when the event happens that you have the insurance to cover, you think that your claim will be paid in the same manner as any of your other dealings with the insurance company. It can be shocking to find that’s not the case. You may find that your insurance company drags its feet in the claims process, only approves certain portions of your claim, or, even worse, denies your entire claim outright. By doing this, the insurance company isn’t handling the claim in good faith. They are operating in bad faith and may be using illegal methods to justify their actions.
Examples of Bad Faith Practices By Insurance Companies
Here are some examples of bad-faith insurance practices that happen:
- Unreasonably delaying your claim
- Failing to explain a denial
- Not investigating your claim thoroughly
- Neglecting to secure evidence in a timely manner
- Ignoring evidence that supports the claim
- Not defending the policyholder against lawsuits that the liability insurance policy should have covered
- Making threats against the claimant
- A refusal to make an offer
- Not making a fair and reasonable settlement offer
- Interpreting vague or overly complicated policy language deliberately to deny claims
- Misrepresenting the policy
- Not communicating with the claimant regarding their claim in a timely fashion
- Any other deviation from insurance industry standard practices
If you believe your insurance company has been improperly handling your claim, it may be time to speak with an insurance lawyer near you. Contact us today to speak with a Philadelphia insurance bad faith lawyer.
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 Philadephia 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 the courts have determined that the insurance company was indeed acting in bad faith towards the claimant, several actions can be taken. They can award the claimant interest on the amount of the claim, which would be the prime interest rate with an additional 3%. The courts can also award punitive damages to the claimant in an effort to punish the insurance company for their bad faith actions. In addition, the court can require the insurance company to pay for the court costs and the claimant’s attorney fees.
How Can A Bad Faith Insurance Lawyer Near You Help?
When you feel as though you’re getting the runaround from your insurance company, it can be time to get a bad faith insurance lawyer involved. An experienced lawyer can assist as they know the different tricks that insurance companies use to delay or deny insurance claims. Some insurance companies may be more willing to handle your claim in good faith once they realize you have legal representation. If they continue to act in bad faith, your attorney can assist you in filing a bad-faith lawsuit against them.
Have you been waiting for your claim to be approved, but your insurance company is acting in bad faith? It may be time for an attorney. Before you google insurance lawyers near me in the Philadelphia area, contact us at The Pearce Law Firm Personal Injury & Accident Lawyers P.C. Our experienced team will discuss your insurance claim and the actions the insurance company has taken since you filed your claim to determine the best methodology to handle your potential lawsuit.