When people think of “insurance,” they often think home or auto coverage, not knowing what coverage exists for claims (for you to get money) or for your defense to a claim against you.With representation, you can often overcome an insurance carrier’s denial of coverage, and possibly even sue your insurance company for bad faith, and receive an award for punitive damages, attorney fees, court costs, and even emotional distress and damage to your reputation.
I. Types of Coverage
Let’s look at the types of insurance coverage that often exist. Then we will discuss the insurance companies duties to act in good faith toward you.
A. Homeowner Insurance
Homeowner insurance covers not only issues that happen at your home, such as a tree falling on your house, or someone falling on your steps (causing a claim against you for negligence for your insurance carrier to defend), homeowner insurance also covers your conduct when away from home.
Examples include your dog biting someone (who makes a claim on you) for something an attack that happened off your property. Or, if you are sued for almost anything else, such as accidentally hitting into someone when you are rollerblading, biking, or using a golf cart.
One surprising limitation of home owner coverage is, it typically does not cover damage to your property from a landslide. This requires separate insurance, typically. But if you are sued for damage your property causes to someone else’s – if you fail to contain your own property, and it slides into your neighbor’s yard – your home owner liability coverage will protect you.
B. Renter Insurance
Renter’s insurance not only covers your things in your apartment, it might also cover you for a defense for claims against you for your negligence away from your apartment. Let’s say, you have renter’s insurance and you are walking your dog a mile away from your apartment. It bites someone, causing permanent disfigurement. Now what?
Your renter’s policy might cover the claim against you for pain, suffering, and disfigurement. It can be bad faith for the insurance company to not pay this coverage.
C. Vehicle Insurance
Bad Faith Failure to Provide Medical Coverage
Car insurance covers not only covers you when you are sued for causing an accident, it also includes “no fault” medical coverage for you, that pays your medical bills from the accident, regardless of who is at fault. Every motorist in PA, by law, has at least $5,000 of medical coverage in Pennsylvania. For this, there is no “lien” against your settlement with the negligent party and you never need to re-pay the “no fault” coverage, but it made by different for other sources of medical coverage. Click here to learn more.
This may not sound like much, but this coverage, unlike your health insurance through UPMC or Highmark, has no deductible or co-pay. Plus, if you sue someone for your injuries, you don’t have to pay back your “no-fault” medical coverage out of your settlement.
UM / UIM Coverage
You might also have something called Underinsured or Uninsured Motorist Coverage through your own insurance carrier.
What is this?
You will come to appreciate your UM or UIM coverage if the driver who hits you has little or no liability insurance, and your claim exceeds the value of their coverage, making you have to sue the other person personally, to try to get money form him beyond his coverage, which can be difficult to do.
Instead, if you have UM or UIM coverage, your own insurance carrier stands in the shoes of the party who caused the accident, and provides the additional liability coverage — that the other driver had lacked — up to the amount of UM or UIM coverage you purchased.
So, for example, let’s say you’re in a car accident caused by someone having only 15K in coverage. You are in the hospital for several days, you miss a month of work, and you have broken bones, a head injury, and significant injuries, making your claim worth 100K, but the negligent party only has 15K in coverage, now what? Sue that person, chase him around to find his assets, if any? No.
You need only make a claim on your owner carrier for underinsured motorist coverage. If you have 100K in policy limits, your carrier will get a credit for the other driver’s 15K, and you will get 85K from your own insurance carrier, but without UIM coverage, you get only 15K despite your significant injuries.
Full Tort versus Limited Tort
Make sure you select full tort coverage, otherwise, you are deemed “limited tort,” and you cannot sue for your pain and suffering, absent certain exceptions, as described here, at length. With full tort, your insurance carriers duties toward you will be more clear. You will be better able to bring a claim for bad faith, for example, for the failure to tender UIM coverage, based on “limited tort.”
Motor Vehicle Coverage For Biking, E-Bike or E-Scooter Injuries
Your attorney will want to pay close attention to whether the insurance company is offering a knee-jerk denial of auto coverage when you’re riding a 2 wheel vehicle. Your motor vehicle coverage should always cover you, when struck by a car or truck when riding a non-motorized bike or pedalcycle.
That said, coverage may not be as clear if you are injured when operating an electric powered bike or scooter. There, regarding e-bikes and e-scooters, your motor vehicle carrier may have an exclusion for the operation of a vehicle on the street not intended for highway use. Moreover, absent such limitations in the policy, it may be “bad faith” for your motor vehicle carrier to deny coverage. Talk to a lawyer about coverage for injuries on an e-bike or e-scooter.
D. Business Insurance
This covers not only the claim on you for someone slipping on your sidewalk, but also business interruption coverage (discussed here), and also cyber security issues plus it can even coverage for damage you cause for disparaging another business.
II. Duties by Your Carrier:
Good Faith
Your insurance carrier has a duty to act in “good faith” toward you, meaning, it must be reasonable in its valuation of your claim (or put a reasonable valuation on the claim against you if your carrier is defending you)
Otherwise, you can sue your insurance company for bad faith, and seek an aware of punitive damages and attorney fees.
So let’s say, for example, you hit someone with your car, and you have only $15,000 of coverage. The party you hit is willing to release you if your insurance company tenders the $15,000 available. However, your insurance company refuses, knowing it is liable for no more than 15K, so who cares if the claim is really worth 200K?
The answer is, you do.
If you get sued for 200K, when the case could have been settled for 15K, your time has been wasted and your personal assets are in jeopardy from a verdict that could exceed your coverage.
Plus, a lawsuit on the docket against you makes you look like you refused to pay your debts, when you were in agreement for your carrier to tender 15K of the coverage you paid for. In this instance you can sue your insurance carrier for bad faith.
Damages Recoverable
You may seek damages for your time, aggravation, emotional distress, attorney fees, punitive damages, and even damage to your reputation from the public lawsuit. See 42 Pa.C.S.A. §8371, See Birth Center v. St. Paul Companies, Inc., 787 A.2d 376 (Pa. 2001).
Insurance is a contract, just like any other, and your insurance carrier has a duty to provide the coverage it contractually agreed to provide, or you can also sue for breach of contract.
