When you pay your insurance premiums faithfully, you expect your insurer to honor their end of the contract. Unfortunately, some insurance companies in Kentucky engage in practices that leave policyholders frustrated and financially vulnerable.
What is bad faith insurance?
Kentucky law generally requires insurers to handle claims fairly and in good faith. While not every delay or denial is automatically illegal, certain patterns can signal your insurer is prioritizing its own interests.
The Kentucky Unfair Claims Settlement Practices Act (KRS 304.12-230) legally binds insurance companies to responsibilities. Your insurer must handle claims fairly, promptly and in good faith. However, some insurers still prioritize themselves over your recovery.
Understanding the warning signs can help you protect your rights and know when it’s time to seek legal counsel. If you believe your insurer is treating you unfairly, there may be signs that point to bad faith practices.
Unreasonable delay tactics
A major red flag is when your insurer delays your claim for no good reason. Kentucky law gives companies a fair amount of time to check claims, but long delays can show bad faith. Watch if your insurer keeps putting off inspections or asks for the same papers over and over. They might also take weeks between each step of the process. These are often stalling tactics. The goal is to pressure you into taking less money than you deserve.
Lowball settlement offers
If you receive an offer that does not come close to the amount needed to cover repair costs or other expenses, pay attention. You know the costs of your recovery better than anyone. Lowballing can look like using unrealistic labor rates or omitting necessary repairs You’re not required to accept an offer just because an insurer presents it as “final.”
Misrepresenting policy coverage
Your insurer has a duty to explain your coverage honestly. Perhaps the most egregious sign of bad faith is when insurance companies misrepresent facts or policy provisions. If an insurance adjuster tells you that you do not have coverage when your policy states otherwise, they violate Kentucky law. You should always cross-reference an adjuster’s statements with your policy documents.
Defending your claim
Legal counsel can help you file a bad faith claim. Additionally, filing the claim may allow you to seek punitive damages over original policy limits. If the insurer is not meeting their statutory obligations, a legal professional can ensure Kentucky law holds them accountable.