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You pay your insurance premiums faithfully. You never filed a claim. But when a freak storm severely damages your home, your claim is denied. Do the circumstances provide a good reason for the denial? Or is your insurance company acting in bad faith?

Generally speaking, insurance policies serve two basic purposes. The first is to protect people 
should they suffer a loss to their person or property. This is what is known as first party coverage.

The second purpose of an insurance policy is to provide third party coverage, which protects an insured from losses suffered by others. Under this coverage, the insurance company agrees to defend and indemnify the insured for such loss.

Duties of Insurance Companies

HKQ Law Attorney Michael A. Lombardo, III notes that “In exchange for their premiums, policyholders are owed a number of duties by the insurer.” They include a duty to provide coverage, a duty to uphold the terms of the policy, and a duty to pay any valid claims that are covered by the policy. In addition, insurance companies also owe an implied duty of good faith. The Pennsylvania Unfair Insurance Practices Act also sets forth responsibilities and prohibited procedures.

There are certainly valid reasons for an insurance company to deny claims. For instance, a claim may be denied if the responsible party failed to pay the premiums in a timely fashion. Another example is denying a beneficiary death benefits because the insured failed to disclose medical conditions on the policy application. Failure to report an automobile accident within a reasonable time frame can also lead to a denial of a claim.

Insurance policies often contain exclusions. These policy provisions eliminate coverage for certain risks which the insurer is unwilling to insure. Damage caused by a flood is a common exclusion in homeowners’ policies. Intentional damage is not typically covered. Nor are losses that result from a crime. For example, a Directors and Officers (D & O) policy would typically exclude coverage for loss relating to fraudulent or criminal conduct. Healthcare plans often exclude routine foot care, which is especially important for certain people such as those trying to manage diabetes.

Bad Faith by Insurance Companies

It is not uncommon for insurance companies to deny valid claims. Depending on the situation, the denial may rise to the level of bad faith.

Examples of bad faith by an insurance company include (but are not limited to):

• Failure to affirm or deny coverage of claims within a reasonable time

• Failure to promptly provide reasonable explanation when denying claim or making a compromise settlement

• Failure to comply with or conform to industry standards

• Failure to conduct an adequate and unbiased investigation

• Encouraging policy holder not to hire a lawyer

• Making over burdensome documentation demands not required by the policy

• Misinterpreting documents or policy provisions that favor the claimant

• Altering policy coverage without informing or receiving consent of insured

• Unreasonably misinterpreting policy language

• Using inaccurate or incorrect information to diminish, deny or delay payment of a claim

• Intentionally misinterpreting or misconstruing the law to the disadvantage of the insured

• Attempting to shift blame and responsibility of investigation to insured

When an insurance company is found to have acted in bad faith, a court may:

• award interest on the amount of the claim

• assess punitive damages: and or

• assess court costs and attorney’s fees

How a lawyer can help

Resolving insurance disputes and proving bad faith claims can be complex tasks. These matters are best handled by an experienced attorney adept at interpreting insurance policy language, and the applicable insurance statutes and regulations.

If you’re in the midst of an insurance dispute or feel that your insurance company hasn’t acted in good faith, call HKQ Law at (800) 760-1529.

About HKQ Law

Hourigan, Kluger & Quinn is considered one of the top civil litigation and commercial law firms that has had the privilege of representing more families in the courtroom than any other NEPA firm. The attorneys at HKQ Law have been honored as Super Lawyers, Best Lawyers, Best Law Firms by US News and World Report, and have received the AV Preeminent Rating by Martindale-Hubbel. HKQ Law was recently recognized for one of the top 20 Verdicts in Pennsylvania.

The firm’s Personal Injury Team, led by Attorney Joe Quinn, Jr., has won some of the largest verdicts and settlements in the region's history. The Personal Injury Team focuses on a wide array of personal injury claims and civil litigation, including medical malpractice, auto and truck accidents, aviation accidents, unsafe vehicles, dangerous or defective products, workplace injuries (worker's compensation), construction site accidents, claim denials by insurance companies, dangerous drugs, defective children's products, nursing home abuse and neglect, and falls due to unsafe conditions (slip and fall).

Attorney Joseph A Quinn, Jr. is one of only 100 attorneys in the United States (and one of only three in Pennsylvania) honored with membership in the Inner Circle of Trial Advocates, and one of only 500 attorneys worldwide chosen to be a Fellow of the International Academy of Trial Lawyers. He has been a Pennsylvania Super Lawyer every year since the program began and has been listed in The Best Lawyers in America every year since the publication was established in 1987. Best Lawyers also named him top personal injury attorney for Northeastern Pennsylvania and the Lehigh Valley. In addition, Best Lawyers, in conjunction with U.S. News & World Report, has designated HKQ a Tier 1 Best Law Firm across multiple categories in Northeastern Pennsylvania and the Lehigh Valley.

Since the inception of the firm, the Commercial / Corporate Team led by Attorney Allan Kluger has provided comprehensive, integrated legal services to many of Northeastern and Eastern Pennsylvania's largest corporations, businesses, banks, non-profits and institutions, handling matters involving labor and employment, wills, trusts and estate planning, estate administration, elder law, commercial transactions, residential and commercial real estate, zoning, land use and development, telecommunications, mediations and arbitrations, commercial litigation, title insurance, business planning and business succession, corporate/business structuring, employment discrimination law for employers, banking, creditor’s rights, finance, lender liability defense, covenants not to compete, construction law, mergers and acquisitions and other business matters.

Additional information can be found at or by calling (800) 760-1529.



As Hourigan, Kluger and Quinn addresses the concerns raised by COVID-19, the health and safety of our clients, employees and friends of the firm remain our top priority.

These are very difficult and scary times and we hope that you and your loved ones are safe and symptom free. We recognize that so many of you are understandably anxious about your health, the economic impact of this pandemic and all of the consequences of social isolation.

We also recognize that many of you are anxious about how the coronavirus is impacting the Court systems, our firm and your cases. Although all of our offices are closed, our firm has remained fully operational and we have initiated procedures that allow all of our attorneys and staff to work remotely from their homes. Each of us and our staff will respond to any emails and calls about your cases as quickly as possible.

Our Federal and State Courts have instituted significant changes in their calendars as a result of the coronavirus. Although most courthouses are closed to the public, and Hearings and Trials will be delayed for some time, there are matters that can proceed telephonically and by video. Despite these changes in the Court calendars, we are working diligently on your cases and are determined to do whatever we possibly can to assure an early and just recovery for you and your loved ones. Even under these difficult circumstances, we believe that "Nobody will work harder for you than we will."

With regard to new potential clients, we are not in a position to have an in-person new client meeting, but we will be conducting these initial meetings via phone. New potential clients should call us for a free telephone consultation at (570) 287-3000.


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