Bad faith happens when your insurance company breaches its duty of good faith and fair dealing while processing your claim. Like other states, Kentucky has laws that protect policyholders from insurance companies that act in bad faith. Understanding how to prove a bad faith insurance claim is crucial, which requires assistance from a skilled Kentucky lawyer. While there’s no legal requirement for hiring an attorney, we highly recommend that you do so.
At Gladstein Law Firm PLLC, we have nearly two decades of experience assisting injured victims. We’ve seen our share of insurance companies behaving badly. We know how to recognize a bad faith claim in Kentucky and what you need to do to pursue a claim for damages.
What Constitutes Bad Faith
Before we explain how to prove a bad faith insurance claim, you need to know exactly what bad faith is. The Unfair Claims Settlement Practices Act of Kentucky requires insurance companies to handle all claims fairly and justly. When insurance companies don’t handle claims fairly, there’s a good chance that they have acted in bad faith. Examples of potential bad faith include:
- Misrepresenting a claim’s pertinent facts;
- Misrepresenting relevant language in an insurance policy;
- Failure to thoroughly and promptly investigate a claim for benefits;
- Refusing to pay full benefits to an entitled policyholder or claimant;
- Delaying or refusing to settle a claim when liability is clear;
- Delaying or refusing to pay or claim without any explanation; and
- Using force to persuade someone to file a lawsuit when liability is clear.
The Unfair Claims Settlement Practices Act of Kentucky lists 17 different actions that constitute bad faith. Identifying bad faith isn’t always straightforward. That’s the reason you need a Kentucky bad faith insurance lawyer to represent you.
First vs. Third-Party Bad Faith Claims
Some states only allow first-party bad faith cases, while others allow both first-party and third-party ones. Kentucky is one of the states that allows lawsuits for both first- and third-party bad faith claims.
First-party (i.e., between you and your insurance company) bad faith claims often involve property damage and can stem from numerous policy types, including:
- Auto insurance,
- Homeowner insurance,
- Health insurance,
- Life insurance, and
With a first-party bad faith claim, you would present the claim to your own insurance company.
Third-party (i.e., between you and someone else’s insurance company) bad faith claims arise from liability claims. When the at-fault party’s insurance company acts in bad faith, you can pursue a claim for damages.
How Do I Prove a Bad Faith Claim?
Understandably, one of the most common questions we receive from prospective clients is, How do I prove I have a bad faith insurance claim? To successfully receive compensation in a bad faith claim, you must show the insurance company acted unfairly in handling your claim. As the plaintiff, it’s your responsibility to demonstrate the insurance company’s misbehavior, which isn’t always straightforward. Denying your claim doesn’t necessarily equate to bad faith. That’s why speaking with a lawyer is essential before filing a claim.
So, how to prove bad faith in court? What evidence do you need? Evidence will vary depending on your claim’s circumstances, but some crucial pieces of evidence include:
- Insurance company policy,
- Insurance company’s corporate policies,
- Copies of correspondence sent to you,
- Insurance company’s claim file, and
- Expert witness testimony from people handling insurance claims.
When dealing with an insurance company, it’s wise to take detailed records of your communications. Hold on to all letters and emails. Jot down notes of when you called the adjuster and what they said. Many bad faith claims involve delays and misrepresentations, so tracking your communication can be helpful. Consider detailed notes on what happened during your interaction and what the adjuster said.
Always ask the adjuster to send written correspondence confirming your interactions and what they said. The adjuster may say they don’t send letters like that but note that you asked.
The Process of Filing a Bad Faith Claim
You must send your adjuster a letter to start the bad faith process. This letter should follow your repeated requests for information or when an adjuster begins acting in a way that might be in bad faith. You should not threaten a lawsuit in your initial correspondence. It’s important to prove that you took every opportunity to resolve this issue but that they continued to act in bad faith. Rather than do this independently, work with an experienced Kentucky bad faith lawyer.
Along with putting the insurance company on notice, you want to file a claim with the state insurance board, the Department of Insurance in Kentucky. The department should open an investigation to determine whether the company acted in bad faith. If the investigator finds evidence of wrongdoing, they might levy fines against the insurance company. However, the insurance board cannot compel insurance companies to pay you in bad faith claims.
You’ll likely need to file a lawsuit to successfully recover the money you’re owed in a bad faith claim. Some insurance companies are terrified of bad faith lawsuits, so the company might be willing to settle based on your initial bad faith letter. If you’ve exhausted every avenue and the insurance company isn’t willing to pay, it’s time to have your lawyer file a lawsuit. Hiring a lawyer with bad faith insurance experience is crucial because of the complex nature of bad faith insurance claims.
Contact a Kentucky Bad Faith Insurance Lawyer
If you need assistance with how to prove a bad faith insurance claim, the legal team at Gladstein Law Firm is standing by and ready to assist. With almost 20 years of insurance claims experience, we know how to identify bad faith practices. Insurance companies try to get away with as much as they can. However, when they break the law, it’s up to you to hold them accountable. The more times they get away with bad faith practices, the more they continue to do it.
When you hire Gladstein Law Firm to represent you, we’ll be there every step of the way. We have the experience and resources to take your case to trial if warranted. Contact our office today to schedule a consultation to learn how to prove bad faith insurance claims in Kentucky.