Carol Rosenbloom Associates, LLC | Pittsburgh, Pennsylvania
Disability Insurance Attorney •Pennsylvania Insurance Bad Faith Act
Disability insurance is meant to protect individuals and their families from the financial consequences of a disabling injury. Unfortunately, a disability insurer may refuse to pay the proceeds of the policy for any number of reasons in order to avoid paying benefits under the policy. One trial court has ruled that although partial payments are not specifically required by an insurance carrier, the company must accord the interests of its insured the same faithful consideration it gives its own interests. Accordingly, the Court held that the insurance company engaged in bad faith when it failed to make a partial claim in an underinsurance claim. The case is on appeal.
If your insurance carrier's denial is frivolous, unfounded, dishonest, or otherwise in "bad faith," under Pennsylvania law, you may be entitled to compensatory damages, interest, punitive damages, attorney’s fees and court costs.
Does Bad Faith Apply To Disability Insurance Claims?
There are essentially two types of Disability Insurance Policies: the Long Term Disability or Group Policy (LTD) and the Individual Disability Income Policy (DI).
LTD Policies are generally governed by ERISA, or the Employee Retirement Income Security Act of 1974. Recent Federal Court decisions have, for all intents and purposes, determined that there is no State Insurance bad faith cause of action under ERISA.
The U.S. Supreme Court held in Aetna Health v. Davila (2004) that ERISA preempts a state statute cause of action in a non-LTD ERISA case. The 3rd Circuit Court of Appeals held in Barber v. UNUM Life Insurance Company of America (2004) that the Pennsylvania insurance bad faith statute is preempted by ERISA in an LTD case. Therefore, it is likely that the U.S. Supreme Court would hold that ERISA preempts a state statutory bad faith claim in an LTD case when or if presented with these facts. This then leaves no "toothful" punitive remedy to enforce the covenant of "Good Faith and Fair Dealing" in an ERISA LTD case. The Courts have effectively condoned any claims practice in LTD cases.
On the other hand, the Pennsylvania bad faith statute (as well as other States’ similar Statutes) does apply to DI claims. However, an insured needs to understand that insurance bad faith is very hard to prove and is often confused with either claims handling conduct that does not rise to the Bad Faith level of severity, or with an adverse decision, despite your disagreement, with a reasonable basis.
If your disability insurance claim has been denied and you believe the denial was made in bad faith claim, contact Pennsylvania bad faith insurance lawyer at Carol Rosenbloom Associates, LLC, today to schedule a free initial consultation.
At Carol Rosenbloom Associates, LLC, we have a thorough understanding of the laws governing insurance bad faith in Pennsylvania.
Lately, insurers are suing their insureds in declaratory judgment actions to support the insurers’ denial of a first party claim. There are several motives for the popularity of such litigation with insurers. The declaratory judgment action is a technique by which insurers can be aggressive, rather than inactive and wait for insureds to act. Insurers can decide when it wants to bring the lawsuit and in what court, federal or state. Insurers can also decide who to sue. This allows insurers to gain the upper hand and control the litigation. This ability significantly increases its opportunity to win. Traditionally, insureds had fours years to bring a lawsuit to resolve a first party claim and could budget accordingly. However, with the declaratory judgment action, insureds could have to decide within a day after the denial to pay additional money for an attorney or lose the claim. At least one State has prohibited such a practice. Unfortunately, the Pennsylvania courts have not explicitly addressed the question, but we believe that such action should be reviewed for bad faith.
We welcome the chance to work for justice and a vindication of your rights in the face of a dishonest insurer. To learn more about insurance bad faith, contact our Pennsylvania insurance bad faith attorneys today to schedule a free initial consultation.
We offer free initial consultations. The majority of our services are provided on a contingent fee basis. This means you will pay no attorneys' fees unless we are able to achieve a verdict or settlement on your behalf.
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Carol Rosenbloom Associates, LLC
Toll Free: 1-800-511-2411
carol@callmylawyer.net
The Pittsburgh, Pennsylvania, law firm of Carol Rosenbloom Associates, LLC represents families and individuals in personal injury, medical malpractice, disability insurance bad faith, and workers' compensation. We serve clients throughout Allegheny County, Butler County, Westmoreland County, Cambria County, Blair County, Indiana County, Somerset County, Beaver County, Fayette County, Greene County, and Armstrong County, and areas including Monroeville, Wexford, Cranberry Township, Butler, Greensburg, Ford City, Murrysville, New Kensington, Johnstown, Ebensburg, Altoona, Hollidaysburg, Indiana, Somerset, Beaver, Beaver Falls, Aliquippa, Uniontown, Connellsville, Waynesburg, and Kittanning, PA
