Should you sue the insurance company for bad faith?

On Behalf of | Oct 14, 2019 | Insurance Bad Faith

After the accident, you immediately called the insurance company and filed a claim. The matter seemed to drag on forever, and now, you have received a denial.

Did the insurance company act in bad faith?

What is bad faith?

According to United Policyholders, for you to prove a bad faith claim in Kentucky, you would need to show three things:

  • That the policy obliges the insurance company to pay
  • That the insurance company does not have a reasonable basis to deny your claim
  • That the insurance company knew it did not have a reasonable basis to deny your claim, or else that its denial showed a reckless disregard for whether there was a reasonable basis

The insurance company may be guilty of acting in bad faith if it failed to conduct an investigation that was reasonable based on the information you provided, and refused to settle a claim when the liability for that claim was reasonably clear.

What damages does a court consider?

You may sue for more than one type of damages. In addition to the amount you are due for the claim, you may receive consequential damages. This refers to the damages that occurred because of the denial, and includes mental and emotional distress you may have suffered because your claim was delayed, and then denied. You may also receive attorney fees.

Perhaps the actions of the insurance company were shockingly offensive, obviously stemming from an evil motive or recklessly indifferent to your rights. In that case, the court may award punitive damages, both to punish the bad behavior of the insurance company and to create an example for other companies to deter such actions.

This general information about insurance bad faith is provided for educational purposes only and should not be interpreted as legal advice.