In Wenk v. State Farm Fire and Casualty Co. and HJ Enterprises, Inc., 242 A.3d 309 (2020 Pa. Super. 26), the Court rejected plaintiff’s claim for institutional bad faith under Pennsylvania’s bad faith statute, 42 Pa. C.S. §8731. Under Pennsylvania’s bad faith statute the Court must find the insurance company acted in bad faith “toward the insured” and not just “the world at large.” In this case, the insured attempted to hold the insurance company responsible for its general corporate policies and practices in handling claims. However, the institutional claim for bad faith was rejected with the Court finding that an insurance company’s corporate practices do not support a recovery under the bad faith statute unless a plaintiff could establish a causal nexus between the business policies and practices and the specific claims asserted in support of bad faith. On the evidence presented in the case, State Farm’s policies and procedures, when applied to the plaintiff’s specific claim, were not improper and could not be used to support a non-existing claim for institutional bad faith. Thus, evidence of an insurance company’s corporate policies and practices in handling claims generally is irrelevant to a particular bad faith claim. Those practices can only be relevant when the practices were utilized in plaintiff’s direct claim.
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