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Bad Faith

9/28/2017 | Construction Blog

On September 28, 2017, the Supreme Court of Pennsylvania, in Rancosky v. Washington National Insurance Company, held that in order to recover in a bad faith action against an insurer under 42 Pa.C.S. §8371, the plaintiff must “present clear and convincing evidence (1) that the insurer did not have a reasonable basis for denying benefits under the policy and (2) that the insurer knew of or recklessly disregarded its lack of a reasonable basis.” Further, the Court held that proof of an insurance company’s motive of self-interest or ill-will is not a prerequisite to prevailing in a bad faith claim under Section 8371, observing that evidence of the insurer’s knowledge or recklessness as to its lack of a reasonable basis in denying policy benefits is sufficient.