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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 joined United Policyholders ("UP") in January 2014. As Staff Attorney, he works 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 supports the Roadmap to Recovery and Roadmap to Preparedness Programs. Dan's relationship with UP began as a student in Professor Ken Klein's disaster law seminar where Executive Director Amy Bach was a guest lecturer. As a law student volunteer for UP, he researched trends in bad faith insurance law and tracked Superstorm Sandy insurance litigation. Dan gained transactional and litigation experience as a law clerk for Higgs, Fletcher and Mack, a mid-sized San Diego-based business law firm and externed with the U.S. Environmental Protection Agency Office of Regional Counsel in Chicago. Before joining UP, he was a post-bar intern at the Alliance for the Great Lakes, a Chicago-based environmental group.
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. He is a member of various professional associations, including: the American Bar Association - Tort Trial and Insurance Practice Section, where he serves as Vice Chair of the Property Insurance Law Committee, the American Association for Justice, and the Consumer Attorneys of California. Dan also 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.