A Pennsylvania insurance coverage / bad faith question:

I bought my home 5 years ago from estate.  Now, I’m selling my home, the buyer’s title insurance company found 3 problems, including a tax lein of 55.00 plus penalties.  My title insurance company offered ademity letter to new title insurance company.  They don’t want that, they want problems resolved.  My title insurance company says too bad.  Not worth the money to find my file.  They don’t know whether claims are valid or not.  Will not resolve them or see if they need to be resolved.  Won’t even look at file!  This seems wrong.  What should I do?  We had a closing date of Sept.29 that will probably have to be moved.  May lose sale.  Do I need a lawyer?

And my response:

You should speak with a plaintiff’s attorney experienced in bringing bad faith claims against insurance company.

When an insurance company breaches the terms of the insurance policy the insured can bring a claim for breach of contract and recover the damages resulting from the insurance company’s breach. A number of title insurance policies include a requirement that the title insurance company actively work to resolve title issues, and every one I’ve seen requires the title insurance company at least pay for all damages resulting from such title issues, up to the policy limits. It sure seems like your title insurance company is refusing to do that, which is a breach.

Moreover, in Pennsylvania, every insurance company has a legal duty to promptly and reasonably evaluate and adjust claims in good faith. If they don’t, there is a specific legal claim available against them which can include the award of attorneys fees, interest and punitive damages. It does not seem like your claim has been evaluated fairly.