The Pennsylvania Supreme Court ruled that an insurer’s agreement to pay a damage award in excess of the policy limits does not extinguish an insured’s right to pursue a bad faith action under the Pennsylvania bad faith statute for the insurer’s bad faith refusal to settle. The court also ruled that the insured’s damages are not limited to the statutory damages (the excess verdict, interest, punitive damages and attorney’s fees) and allowed the Birth Center to pursue a claim for compensatory damages. As the court stated, “the statute was not meant to decrease existing remedies but to add to them.” The Birth Center vs. St. Paul Cos.
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