Investigating The Bad Faith Insurance Claim In Pennsylvania
- Start with the Victim
The first step involved in investigating a potential claim for bad faith begins with the victim of an insurance company's conduct. Find out all information available concerning the dispute including the identity of all potential witnesses. Each and every step taken by the client and the insurance company and its agent should be documented in chronological order. Obtain copies of the insurance policy as well as all correspondence between the client and the insurance company and/or its agent. Obtain copies of all bills incurred by the client (both paid and unpaid) and all documentation of loss (i.e. estimates).
If the case involves medical issues be sure to obtain copies of all doctor and hospital records. A thorough interview combined with a review of the available documentation provides a clear understanding of the claim. Remember, however, that a claim for bad faith is based upon the information in the hands of the Carrier. You must make sure that the insurance company had the same information as your client. It is essential to review all communications between the carrier and the insured. Of special importance is the letter from the insurance company denying coverage or payment. This letter should state with specificity all reasons for the company's actions in denying benefits or coverage. It will form the basis of the carrier's defense.
- Dealing with the State Insurance Department
The Pennsylvania Insurance Department is the agency responsible for investigating claims made against insurance companies. The Insurance Commissioner is invested with certain powers by the Unfair Insurance Practices Act, 40 P.S. Section 1171.1 et seq. to punish those companies or individuals that violate the law.
If you believe that a certain carrier or agent has acted in bad faith towards your client it is important to make a claim with the Insurance Department. A claim may be made in letterform outlining to the agency the wrongful conduct. The local office in Pittsburgh is:
Pennsylvania Insurance Department
300 Liberty Avenue
304 State Office Building
Pittsburgh, PA 15222
ATTENTION: Complaints Section
An investigator is assigned who obtains from the insurance company a response to the claim for damages. The Commissioner then decides what action should be taken against the insurance company. The process provides the plaintiff's lawyer with the opportunity to discover, before litigation, the defenses, which will be raised by the insurance company. It may also serve to push the Insurance Department to take action against unlawful conduct. Such action will only serve to strengthen your cause of action in the bad faith litigation.
- Contacting the Insurance Agent
The insurance agent is a valuable source of information, which may assist the attorney in evaluating a potential bad faith claim. The agent may have an exemplar copy of the policy as well as copies of correspondence to and from the insurance company. Most times the client has attempted to resolve the dispute by contacting and working through the agent. The agent may provide a wealth of information to substantiate the bad faith claim. However, the agent may prove to be a brick wall providing little or no information prior to litigation.
The insurance agent may also be the target of your bad faith claim. Great care should be taken in obtaining information or communicating with the agent who is a potential defendant. It may be beneficial to place the agent on notice of the claim and then to work with the insurance company, which provides errors and omissions coverage to the agent, or his company.
- Know the Facts
Before bringing any claim against an insurance company, the lawyer must know all the facts. Litigation is a time consuming and expensive endeavor. A thorough investigation will protect the client, the lawyer and may serve speed the resolution of the case. Any journey begins with a single step, litigation against an insurance company begins with the investigations.