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Pennsylvania Statutory Bad Faith Claims Cannot Be Maintained Against Insurance Agent

October 31, 2017

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A Pennsylvania Court recently ruled that a plaintiff-insured could not maintain a claim for statutory bad faith against an insurance agent, since Pennsylvania’s bad faith statute only governed the conduct of insurers.
In <a href="http://blog.wcmlaw.com/wp-content/uploads/2017/10/Fertig-v.-Kelly.pdf">Fertig v. Kelly</a>, plaintiff was involved in a motor vehicle accident and sued the driver of the other vehicle, the plaintiff’s insurance carrier, and the plaintiff’s insurance agent.  Plaintiff alleged his insurer and agent acted in bad faith in investigating and evaluating his claim.  In determining whether the plaintiff could sustain his claim for bad faith against his insurance agent, the court first determined the allegations asserted against the agent did not meet the standard required to constitute bad faith under the Pennsylvania statute.  Moreover, the court concluded that even if the plaintiff’s allegations were sufficient to meet the bad faith standard, Section 8371 only applied to bad faith conduct of an insurer, as that term was defined by the statute.
If you are defending a bad faith claim on behalf of an insurance agent, this case can serve as the basis to dismiss the complaint early on in the litigation process.
Thanks to Colleen Hayes for her contribution to this post.
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