Insurance Bad-Faith Practices

A network news report has shined a light on the insurance industry’s long-held practice of denying, delaying or defending against claims made by those who have suffered soft-tissue injuries in minor-impact car crashes.

Cable television news network CNN recently conducted an 18-month investigation into the insurance industry, reviewing more than 6,000 documents and court records and interviewing dozens of industry insiders and accident victims.

The investigation revealed that insurance companies, including Allstate and State Farm, have adopted a “take-it-or-leave-it” strategy of denying claims, making unreasonably low settlement offers or engaging in litigation that makes pursuing a claim so expensive and time-consuming that it forces a personal injury victim to give up. According to CNN, the companies developed this policy in the mid-1990s with the assistance of a consultant, McKinsey & Co. In one McKinsey document that the network obtained, the consultant recommended that Allstate put boxing gloves on its “good hands” for those with soft-tissue injuries who insisted on going to court.

The injury & accident lawyers of Munley, Munley & Cartwright pursue justice for victims and consumers in personal injury litigation and accident claims throughout Pennsylvania and the U.S. If you believe an insurance company is treating you unfairly over your injury claim, contact Munley, Munley & Cartwright today for a free consultation or call us toll free at 877-421-9173.

Soft-tissue injuries are those involving strains, sprains, tears and soreness of muscles, tendons and ligaments. The symptoms can include pain, swelling, bleeding and even a complete loss of function. The insurance companies have likely targeted soft-tissue injuries because even though they are common in car crashes, they are not readily detectable in X-rays.

Fortunately, Pennsylvania residents are not without a remedy when they believe they have been the victim of a bad-faith insurance practice. Under the state’s Unfair Insurance Practices Act (UIPA), consumers can recover compensation by showing that an insurer:

• Did not have a reasonable basis for denying benefits under the applicable insurance policy; and
• Knew or recklessly disregarded its lack of a reasonable basis in denying a claim.

An insurance company’s bad faith can take many forms, including:

• Making an unreasonably low offer to compensate for damages, or “low balling;"
• Delay or denial of a claim without reason
• Ambiguous policy wording
• Failure to investigate or perform due diligence
• Failure to act within a reasonable time
• Delay in payment while waiting on a settlement with a third-party insurer
• Intentional deception and fraud
• Refusing a settlement offer and then losing in court for an amount larger than is provided for in the policy.

If a court finds the insurer has acted in bad faith, the court may take all of the following actions:

• Award interest on the amount of the claim from the date the claim was made by the insured in an amount equal to the prime rate of interest plus three percent
• Award punitive damages against the insurer; or
• Assess court costs and attorney fees against the insurer.

The insurance bad faith lawyers at Munley, Munley & Cartwright, P.C. take all claims dispute cases on contingency, meaning there are never any fees until we obtain a verdict or settlement on your behalf. We understand the complexity of taking on insurance companies and the challenge of proving bad-faith claims. We strive to achieve the highest standard of excellence for the protection of individual rights through teamwork and the use of our considerable resources and experience.

For a free consultation regarding your legal concerns, contact us today for a free consultation or call us toll free at 877-421-9173.