You want to think your insurance company will be there for you when you need it. But what if you’re wrong? What if you made a claim on your insurance policy for a relatively small amount of money – just enough to help you get your life back on track after an accident – and your insurance company flat-out denied your claim with no explanation? It happened to a Bensalem, Pennsylvania man, and it could happen to you.

An Ordinary Beginning

In June 2007, our client was hurt in an accident that wasn’t his fault. His injuries, some of them serious and permanent, changed his life. He missed work and lost wages as a result. He racked up medical bills getting treatment. All of these bad things happened to him because the other driver had been careless. So our client decided not to remain a victim. He decided to do something about it.

We led him through the claims process. On his behalf, we recovered the full policy limits – that is, all the money available to him – under the policy of the driver who hit him. But it still wasn’t enough. Luckily, our client had purchased underinsured motorist coverage as part of his insurance policy. He had been paying for this extra coverage in his premiums in case a situation like this should arise. Now his smart investment in extra coverage was going to pay off – or so he thought.

Extraordinarily Bad Behavior

The underinsured motorist claim was relatively small, but our client’s insurance company didn’t let that stop them from denying it entirely – simply saying it’s not covered. The adjuster couldn’t give our client a reason for the denial, probably because there was no legitimate reason. Our client had done everything right. From a legal standpoint, denying the claim was ridiculous.

Yet the insurance carrier continued to ignore the victim and refused to acknowledge our attempts at resolution. It failed to investigate the accident before issuing its arbitrary decision not to pay the claim. The insurance company filed its own civil action, called a declaratory judgment act, in another county, seemingly out of spite. There was no basis for the denial of coverage, and the insurance company personnel knew it. The company withheld hundreds of pages of documents relevant to the case not only from us, but also from a judge. When at last the judge ordered the insurance company to turn over all of these omitted documents, the carrier suddenly offered to settle. It knew that as soon as the judge, and we, saw those documents, it would prove what we had said all along – that the company had a legal duty to pay this claim.

Without question, the insurance company’s behavior was unreasonable. Denying coverage of a legitimate claim to your own policyholder is the harshest thing you can do, and this insurance company took every imaginable measure to weasel out of paying the claim. The sad part is that its actions really hurt the victim in this case. Because the insurance company had breached the contract, we were able to get far more money for the claim due to Pennsylvania’s relatively strict bad faith laws. But it took years of struggling and frustration to finally reach that victory, and in the meantime, an innocent man and his family continued to suffer – all so a selfish insurance corporation could keep a few extra bucks.