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Is your insurer acting in bad faith or merely negligent?

On Behalf of | May 25, 2022 | Bad Faith Insurance

People often assume that an insurance company will pay them as little as possible when they make a claim. To some extent, that’s true. Insurance companies don’t make money by paying out more than they have to. However, they do have an obligation to settle claims based on what your policy covers, the facts of the specific situation and the law. That means paying a fair amount on time.

So how do you know if your insurance company is acting in bad faith? Maybe the insurance company was negligent in handling your claim, or perhaps they used poor judgment. Those alone aren’t grounds for a bad faith legal claim.

An insurance company acts in “bad faith” if it intentionally engages in unfair and/or dishonest practices. Under Pennsylvania law and court rulings, bad faith is actionable with a legal claim if the insurer knew it was being unreasonable, engaged in the action(s) anyway and did so for its own self-interest or out of ill will. Plaintiffs have the responsibility of proving that their insurer acted in bad faith.

Examples of bad faith tactics

It’s not uncommon for people to be dissatisfied with how long it takes their insurer to pay out on their claim and with the amount of the settlement. However, those things in and of themselves aren’t grounds for a claim. Let’s look at some examples of bad faith tactics:

  • Unreasonable delays in investigating claims
  • Failure to completely investigate claims
  • Paying less than a claim is worth or refusing to pay a valid claim
  • Failure to notify policyholders of deadlines and requirements for submitting information for claims
  • Misrepresenting language in the policy and/or the law to minimize their payout

Basically, any kind of intentional dishonesty or deception that keeps the insurance company from paying the policyholder the settlement to which they’re entitled under the terms of their policy is considered “bad faith.” If you believe that your insurance company has acted in bad faith, it’s wise to seek legal guidance.