Pennsylvania’s Supreme Court ruled that ill-will or malice is not required as a prerequisite in bad faith claims any longer. The ruling will change the legal atmosphere of all insurer bad faith claims moving forward. This is the first time that the court has considered bad faith claim elements.
The Supreme Court decided in a recent ruling that acts in such a way that can be conceived as reckless to deny benefits to a person that is ensured with a lack of a reasonable basis, this is enough evidence to build a bad faith claims.
“Rancosky’s” bad faith ruling is agreed upon by attorneys that it will have a significant impact on bad-faith insurance claims. The ruling is expected to provide a sense of clarity for cases going forward in the state and provide uniformity for bad-faith claims.
The case follows events that began in 1992 with Appellee LeAnn Rancosky, who was working with the United States Postal Service, obtained a cancer insurance policy. The policy stated that she would not pay premium payments fi she had her policy for more than 30 days, and she was disabled for a period of 90 days.
She was diagnosed with ovarian cancer in February 2003.
She stopped making premium payments after the third month, but her insurer, Conseco, didn’t realize the matter and instead stated that her policy lapsed in May 2003 when she made her final payment. Conseco paid for treatment until 2005 before denying coverage in 2006.
Recurrence of her cancer occurred in 2006, leading to the bad faith lawsuit. Conseco never investigated a discrepancy in disability dates between Rancosky and her physician. The events led to the bad faith lawsuit in which she claimed that the insurer breached their contract in bad faith.
“Insurance companies owe their customers a duty of good faith and fair dealing, which means that they must treat their customers fairly by, at all times, considering its interests at least equal to insured customer’s interests,” states https://mattsharplaw.com/.
Attorneys suggest that the biggest change that the ruling will bring is the ability to move cases further into litigation. Prior to the ruling, it had been hard for plaintiffs to get through the motion to dismiss phase. Attorneys believe that the change will provide “an even playing field” for plaintiffs to prove their cases.
A wider ability to make discovery will allow cases to last longer and uncover insurance carrier motives.