Resolving an issue that has been disputed in just about every courtroom in PA, the PA Supreme Court has determined, once and for all, that the two-year statute of limitations applies to bad faith claims brought under 42 Pa.C.S.A § 8371. You can read all about it in Ash v. Continental Insurance Co., No. 35 WAP 2005 (Oct. 11, 2007) (Eakin, J.). Briefly summarized, the Court decided that such claims, while created by statute, are most like tort claims and should be subject to the two-year statute of limitations imposed by 42 Pa.C.S.A § 5524.
