In Pennsylvania, bad faith insurance claims arise when an insurance company unreasonably denies, delays, or undervalues a valid claim without a legitimate basis.
Under 42 Pa.C.S. § 8371, Pennsylvania law gives you the right to sue your insurer directly for this conduct and recover punitive damages, attorney’s fees, interest, and more, on top of what you were originally owed.
Insurance companies have teams of adjusters and lawyers whose job is to pay you as little as possible, and they routinely deny valid injury and accident claims to protect their bottom line. Some will use insurance company tactics to misrepresent your policy, stall your claim, or shift the reason for your denial, hoping you give up.
Knowing what bad faith looks like, what you must prove, and what damages you can recover puts you in a far stronger position to hold them accountable.
What Pennsylvania Laws Protect You from Bad Faith Insurers?
Before 1990, you could not directly sue your insurer for bad faith in Pennsylvania. Injured people had to rely on workarounds like breach of contract claims, which rarely punished insurers enough to change their behavior. Today, three main legal rules protect you:
- 42 Pa. C.S. § 8371: The primary law that lets you sue your insurer and recover punitive damages, interest, attorney’s fees, and court costs.
- The PA Unfair Insurance Practices Act (40 P.S. § 1171.1 et seq.): Defines exactly what counts as unfair claim handling. Courts use it as a benchmark to decide whether your insurer behaved reasonably.
- 31 Pa. Code § 146.6: Requires insurers to acknowledge and act on your communications within 10 business days.
Understanding these laws matters because they shape exactly what we must prove on your behalf.
What Must You Prove in a Pennsylvania Bad Faith Claim?
To win a bad-faith lawsuit, you must meet a standard called clear and convincing evidence. This means showing the court that your claims are highly and substantially more probable to be true than not—a higher bar than in most civil cases.
Under the 2017 Pennsylvania Supreme Court case Rancosky v. Washington National Insurance Co., two elements must be proven:
- The insurer had no reasonable basis for denying or delaying your benefits.
- The insurer knew — or recklessly disregarded — that it had no reasonable basis for its decision.
One important clarification: you do not need to prove the insurer acted out of ill will or malice toward you personally. Simply showing they recklessly ignored the facts of your claim is enough.
What Does Bad Faith Look Like in a Real Pennsylvania Case?
Bad faith can arise in two main situations.
First-party bad faith occurs when your own insurer — such as your auto or personal injury protection (PIP) carrier — mistreats you.
Third-party bad faith happens when a liability insurer refuses to settle a claim against its own policyholder within policy limits, exposing that person to a verdict far beyond their coverage.
Based on the Pennsylvania Unfair Insurance Practices Act and state case law, common examples of bad faith conduct include:
- Denying your claim without conducting a proper investigation.
- Failing to respond to your communications within a reasonable timeframe.
- Misrepresenting your policy terms or coverage limits to avoid paying you.
- Offering an unreasonably low settlement compared to your documented medical bills and damages.
- Forcing you to file a lawsuit when liability is already clear.
- Repeatedly requesting documents you have already provided.
- Changing the stated reason for denying your claim over time.
When an insurer crosses this line, Pennsylvania law gives you real leverage to fight back.
What Damages Can You Recover in a Pennsylvania Bad Faith Lawsuit?
Under 42 Pa.C.S. § 8371, you are not limited to recovering just what the insurer originally owed you. Pennsylvania law allows you to pursue:
- The underlying claim amount: The money the insurer should have paid you in the first place for your injuries or property damage.
- Interest: Calculated at the applicable legal interest rate, running from the date your claim was originally made.
- Attorney’s fees and court costs: The financial burden of the lawsuit shifts from you to the insurance company.
- Punitive damages: Money designed to punish the insurer and deter future misconduct — these can far exceed your policy limits.
- Consequential damages: In some cases, additional financial harm caused by the bad faith conduct itself, such as lost income or damaged credit.
Punitive damages are often calculated based on the insurer’s overall wealth and the severity of its misconduct. This is exactly why insurance companies take bad faith claims so seriously — and why you should too.
What Is the Deadline to File a Bad Faith Claim in Pennsylvania?
In Pennsylvania, you have two years from the date of the bad faith conduct to file a lawsuit. This rule was established in the 2007 case Ash v. Continental Insurance Co.
The clock typically starts on the date the insurer committed the wrongful act—such as the day it issued an unreasonable denial letter—not the date of your underlying accident or loss. Missing this deadline permanently forfeits your right to sue, so acting quickly matters.
What Evidence and Red Flags Should You Watch For?
At Wilk Law Personal Injury & Car Accident Lawyers, we build your bad faith case by demanding the insurer’s full claim file and retaining industry experts when needed. But there are steps you should take on your own from the very beginning.
Documents to Preserve Right Away
Save everything from the moment you suspect your insurer is not treating you fairly:
- Your full insurance policy, declarations page, and all endorsements.
- Every denial letter, reservation of rights letter, and adjuster correspondence.
- Detailed call logs, voicemails, and emails with dates and times.
- All medical records, bills, repair estimates, and proof of your damages.
- Any UM/UIM stacking forms or releases you were asked to sign.
Red Flags That Your Insurer May Be Acting in Bad Faith
Insurance adjusters often use subtle tactics to frustrate you into giving up or accepting far less than you deserve. Watch for these warning signs:
- Missed deadlines: Your insurer fails to respond within the timeframe specified by 31 Pa. Code § 146. 6.
- Repeated document requests: The adjuster keeps asking for records you have already submitted.
- Shifting denial reasons: The stated reason for your denial keeps changing.
- No written explanation: Your insurer refuses to provide a clear, written basis for denying your claim.
- Pressure tactics: You are pressured to sign broad medical releases or give recorded statements without a lawyer present.
We believe no one’s right to justice should depend on their ability to outlast a predatory insurance company. If your insurer is treating you unfairly, we are here to fight back on your behalf.
Our Pennsylvania personal injury lawyers serve clients across Pennsylvania, including Philadelphia, West Chester, Allentown, Reading, Coatesville, and Pottstown, and we offer free consultations to get you started.
Bad Faith Insurance Claims in Pennsylvania FAQ
Can I Sue My Own Auto Insurer for Bad Faith on a UM/UIM or PIP Claim?
Yes. If your own insurer unreasonably delays or denies your valid uninsured or underinsured motorist (UM/UIM) or personal injury protection (PIP) claim, that qualifies as first-party bad faith under Pennsylvania law, and you have the right to sue.
Can I File Both a Breach of Contract Claim and a Bad Faith Claim at the Same Time?
Yes, and we frequently do this. The breach of contract claim recovers what you were originally owed under your policy, while the bad faith claim pursues punitive damages, interest, and attorney’s fees on top of that.
If My Insurer Eventually Pays My Claim, Can I Still Pursue Bad Faith?
Yes. Unreasonably delaying your payment for months or years is itself a violation of Pennsylvania law, even if the insurer ultimately pays. The delay alone can form the basis of a valid bad faith lawsuit.
Does the PA Unfair Insurance Practices Act Let Me Sue My Insurer Directly?
No. The PA Unfair Insurance Practices Act does not give you a private right to sue your insurer on its own. However, we use its definitions of unfair practices as powerful supporting evidence in your bad faith lawsuit under § 8371.
Do I Need to Prove My Insurer Acted with Malice or Ill Will Toward Me?
No. Under Rancosky v. Washington National Insurance Co., you only need to prove your insurer lacked a reasonable basis for its decision and recklessly disregarded that fact. Proving personal malice or ill will is not required.
Are Bad Faith Claims Assignable to Injured Victims in Pennsylvania?
Yes. The Pennsylvania Supreme Court has ruled that statutory bad faith claims under § 8371 can be assigned to a third party, such as an injured victim. This allows the victim to step into the at-fault driver’s shoes and pursue the liability insurer directly for its failure to settle within policy limits.
How Long Does a Pennsylvania Bad Faith Lawsuit Typically Take to Resolve?
A bad faith lawsuit can take anywhere from several months to a few years, depending on the complexity of your case and the insurer’s willingness to settle fairly. Because insurers aggressively defend against punitive damages, these cases often require significant litigation before a resolution is reached.
