Louisville, KY Insurance Bad Faith Lawyers – Representing the Victims of Insurance Bad Faith in Kentucky
Kentucky has extensive laws governing insurance bad faith. For example, Kentucky has adopted The Unfair Claims Settlement Practices Act of Kentucky, which provides a list of 17 types of prohibited claims-handling conduct, including:
- Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue;
- Failing to acknowledge and act reasonably promptly upon communications with respect to claims arising under insurance policies;
- Failing to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies;
- Refusing to pay claims without conducting a reasonable investigation based upon all available information;
- Failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed; and
- Not attempting in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear.
To see the full list of these items, please visit http://www.lrc.ky.gov/statutes/statute.aspx?id=17037.
Under both Kentucky’s statutes, an individual may bring a claim directly against an insurance company for a statutory violation (in many other states only the insurance commissioner is allowed to bring a claim against an insurance company for a statutory violation).
Bad Faith is a Separate Claim Against an Insurance Company
Is important to understand that insurance bad faith is a separate claim that may be made against an insurance company in addition to the underlying claim in which damages are being sought. For instance, if your car was totaled by an uninsured driver, you will have a claim against your insurance company for the fair market value of your car at the date it was totaled. If your insurance company does not act in good faith and promptly pay your claim, you may have a separate claim against the insurance company for bad faith.
What Actions Constitute Insurance Bad Faith?
The statutes noted above contain specific types of conduct that is prohibited. In general, bad faith in Kentucky is usually shown by a lack of taking fair action in adjusting a claim. While some actions are not definitive, actions that may be construed as insurance that faith include:
- Failing to act promptly in adjusting a claim. Once a claim is made to an insurance company, the insurance company must promptly take action to consider the claim, and to notify the policyholder of the action taken, as well as any additional information needed. Insurance companies cannot simply do nothing for months after a claim has been made.
- Failing to adequately take into account the interests of the insured. Insurance companies must take into account the interests of the insured in evaluating policies.
- Routinely denying claims in the ordinary course of conduct. In some situations, insurance companies have been a policy of routinely rejecting or discounting all claims as a matter of course.
- Lying to policyholders about what is covered in the insurance policy. We purchase insurance policies in part to protect us for our own negligence. If we inadvertently cause damages to our own property or the property of others through accidents, an insurance company cannot simply lie to us and tell us that the policy does not provide coverage because we may be partly to blame.
- Acting in an unreasonably and outrageously, usually to benefit themselves at the expense of their policyholders. If it is clear that our car is worth about $10,000 on the date that it was totaled, the insurance company cannot simply offer $500 as full compensation. They may have a legitimate belief that the actual value of the car is somewhat less than $10,000 (such as if they can show similar cars being listed for sale at $9500) without this legitimate difference being construed as “bad faith.”
Damages for Insurance Bad Faith – How Much is Required to Punish the Insurance Company for their Egregious Conduct?
Damages for insurance bad faith are not meant to compensate the individual for the damages they incurred; rather damages are intended to punish insurance companies for egregious and outrageous conduct so that they will have a strong incentive never to engage in such conduct again. As a result, the underlying value of the original claim (such as the claim for damages for a totaled car) often bears no reflection to the damages determined by bad faith.
In Kentucky damages for insurance bad faith are determined by a jury on a case-by-case basis. In our experience the more outrageous the conduct, the higher the amount of damages. Similarly, since damages are designed to be punitive, the larger the insurance company, the higher an award will likely be.
We Have Been Representing Clients in Insurance Bad Faith Cases for Years
We take insurance bad faith cases seriously. All policyholders have a common expectation and right to be treated fairly by insurance companies, especially after they’ve collected our premiums for years.
If you believe that you have been a victim of insurance bad faith, call us to find out how we can help. There is no fee or obligation for an initial meeting with us.