"We are so grateful that a consumer-focused organization like UP – completely independent of the insurance industry – is there to help families and individuals, homeowners and renters alike, navigate the confusing claims process after a disaster, and to help them before a crisis as well."
Keeping the Faith in Pennsylvania
by Dan Wade
In a landmark decision, the Pennsylvania Supreme Court recently affirmed in Rancosky v. Washington National Ins. Co. that a policyholder victimized by unreasonable conduct by an insurance company does not need to also show the conduct was malicious or intentional. The holding, which upheld the arguments advanced in UP’s “friend of the Court” brief, preserves a policyholder’s remedies when an insurance company withholds insurance benefits recklessly or without a reasonable basis. Put another way, the Pennsylvania Supreme Court refused to make it even harder than it already is for an individual to file a bad faith lawsuit against an insurance company.
The decision is significant for Pennsylvania policyholders because the Court rejected the insurance company’s argument that the prevailing standard for bad faith was too low. The insurance company advanced an argument that the “reckless” and “without a reasonable basis” standard was too low – policyholders must instead show that the insurance company acted with malice or intentional ill will. However, the Court rejected that argument, finding that malice or intentional ill will are merely factors that a Court may consider, but are not a requisite elements for a bad faith claim.
The decision ensures that Pennsylvania policyholders preserve the leverage they have under existing law to hold an insurance company accountable for failing to pay a claim when benefits are owed. In addition, the decision stems the tide of so-called “tort reform” that we are seeing wash over many courts, legislatures, and legal forums. The insurance industry has launched an all out war on the ability of policyholders to hold their insurance company accountable when they do not pay a claim. In Pennsylvania, at least, we won an important battle in this war. Keep the faith!
For a deeper dive into policyholders' legal rights throughout the United States, read: the Rutgers Law School/United Policyholders' Essential Protections for Policyholders Report.
About The Blogger
Dan Wade was the Staff Attorney for United Policyholders ("UP") from March 2014-March 2018. As Staff Attorney, he worked on UP's Advocacy and Action Program, helping draft and coordinate amicus curiae briefs, assists with legislative/regulatory advocacy, and conducts legal research in partnership with UP partners and volunteers. Dan also supported the Roadmap to Recovery and Roadmap to Preparedness Programs. Dan earned his undergraduate degree from San Diego State University in 2007 and his Juris Doctor from California Western School of Law in San Diego in 2013. He was admitted to the Illinois Bar in 2013 and the California Bar in 2014. Dan currently serves as Vice Director of the American Bar Association Young Lawyers Division Disaster Legal Services Program, a partnership with the Federal Emergency Management Agency that delivers free legal assistance to low-income persons affected by disasters, through which Dan coordinates pro bono legal assistance to insurance policyholders in disaster areas.