When you invest in insurance coverage, you expect the company to make good on its promises to you. You could go years without ever needing to make a claim, only to encounter major backlash from your insurance provider when you finally need support. You may eventually need to take your insurance company to court to get coverage or to hold it accountable for trying to deny or minimize a valid claim.
Bad faith insurance practices include the unfair denial of valid claims and other practices intended to deprive policyholders of the coverage they deserve according to their policy’s paperwork. A bad faith insurance claim involves a civil lawsuit against the insurance company.
Do Pennsylvania policyholders have the right to ask for punitive damages in such claims?
Yes, the courts might award you punitive damages
Punitive damages are a court-ordered financial penalty. They don’t reflect the impact of a company’s failings or misconduct but rather serve as a punishment and deterrent. In theory, Pennsylvania state law allows plaintiffs to seek punitive damages in cases involving gross negligence or overt misconduct.
Typically, a successful claim will mean that the insurance company will cover the full cost of the initial claim, as well as interest during the delay based on the prime rate. The courts can also award punitive and economic damages to the plaintiff. The more egregious the misconduct of the insurance company, the greater the likelihood of the courts awarding punitive damage and the more they might decide to grant the plaintiff.
Holding your insurance company accountable via a bad faith insurance claim may take time, but it can be a very important lesson for business.