At a glance
Legal framework
Statute plus contract. The bad-faith remedy is purely statutory — 42 Pa.C.S. § 8371, enacted 1990 — alongside a common-law breach-of-contract claim. Pennsylvania recognises no common-law bad-faith tort: D'Ambrosio (1981) refused to create one and told the legislature to act, which it did nine years later.
Can you sue directly?
Yes — directly under 42 Pa.C.S. § 8371. Rancosky v. Washington National (Pa. 2017) adopted the two-part test: the insurer lacked a reasonable basis, and knew of or recklessly disregarded that lack — both by clear and convincing evidence. Rancosky held proof of a self-interested motive is not required.
Deadline
2 years for the § 8371 claim — Ash v. Continental (Pa. 2007) treats it as a statutory tort under 42 Pa.C.S. § 5524(7). 4 years for breach of the policy (§ 5525(a)(8)). But Pennsylvania's standard fire policy statute, 40 P.S. § 636(2), mandates a 12-month suit clause from inception of the loss, routinely enforced.
Before you file
None required. No notice letter, no cure period, no administrative exhaustion. A complaint to the Insurance Department is optional and tolls nothing, though its file can be useful evidence. The only real precondition is compliance with the policy's own terms and any contractual suit-limitation clause.
What you can recover

Damages available in Pennsylvania

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How to find one yourself, free

The PBA service covers 47 of Pennsylvania's 67 counties; the initial consultation is capped at $30 for 30 minutes. Philadelphia and Allegheny counties run their own programmes, so go to the county bar directly there. Pennsylvania runs no state certified-specialist programme and has no certified insurance-law credential. A lawyer may advertise certification only from a private body approved by the Supreme Court of Pennsylvania, naming the certifier.

Before you sue

How often does your insurer actually pay?

Worth checking before you spend money on a lawyer. Two different measures exist, and they are not interchangeable — one is a real payment record, the other is a complaint count.

Health cover — real denial rates

Published, per insurer

Health insurers selling on the federal marketplace must report how many claims they received and how many they refused. The figures are public and free to inspect.

20%
Average denied, 2023
1%–54%
Range across 175 insurers

The spread is the point. Two insurers selling comparable cover in the same state can refuse wildly different shares of what they are billed for. Look your own up before you assume your refusal was routine.

Source: CMS Transparency in Coverage public use files, plan year 2023 experience. Self-reported by insurers and not audited. Covers federal-marketplace plans only — not employer cover, and not state-run marketplaces. Post-service claims only.

Home, auto & property

No payout rate is published

There is no free public figure showing what share of home or auto claims any named insurer pays. Insurers do report it to regulators, but in most states that filing is confidential. Any table you see online quoting payout percentages for property insurers is either a paid commercial product or an estimate.

What is public is the complaint index — how many confirmed complaints a company generates against its share of the market. 1.00 is average. 3.00 means three times the complaints its size would predict.

Complaint indexes are published by state insurance departments and compiled by the NAIC. Figures move with both the company’s complaints and the wider market’s.

These two numbers are not the same thing. A denial rate is the share of claims an insurer refused. A complaint index is how often customers complained relative to the company’s size. A low complaint index does not mean an insurer pays well, and a high one does not prove it refuses claims — it can reflect the kind of cover it sells or the customers it attracts. Neither figure says anything about whether your claim should have been paid.
The clock

What the insurer is required to do, and by when

Under 31 Pa. Code Ch. 146 the insurer must acknowledge a claim within 10 working days, reply to pertinent communications within 10 working days, and accept or deny within 15 working days of receiving proofs of loss. If it needs longer it must say so in writing, then update within 30 days and every 45 days after.

The thing most people miss

There is no right to a jury on a bad-faith claim in Pennsylvania state court. Mishoe v. Erie (Pa. 2003) held that because § 8371 says “the court” may award relief, a single judge decides bad faith and sets the punitive award. Policyholders routinely get a jury on the contract count and lose it for punitive damages in the very same case.

Unsettled: Mishoe bars a jury on § 8371 claims in state court, but federal courts sitting in diversity have generally allowed juries under the Seventh Amendment — so removal can change who decides punitive damages, a split Pennsylvania's appellate courts have never reconciled.
Free first step

Complain to the regulator before you spend anything

A complaint to the Pennsylvania Insurance Department costs nothing, creates a written record, and sometimes moves a stalled claim on its own. It is not a substitute for legal advice and it does not pause any deadline — but there is rarely a reason not to do it first.

Where this comes from

Sources

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