Mike Breen is a recognized pioneer in insurance bad faith. In 1996, he published his book called Bad Faith in Kentucky: A Primer. Mike’s book has been cited by the Kentucky Supreme Court as authoritative on the subject. He has also taught other lawyers and insurance professionals at dozens of seminars.

Insurance bad faith occurs several different ways. When handling a claim with its own policyholder or insured, a company may violate its duty of good faith and fair dealing by refusing to pay the correct amount, by delaying payment, or by taking advantage of people who have suffered a catastrophic loss from a fire or a storm.

This can happen in a number of different ways. For example, an insurance company that sells a replacement cost homeowner’s policy to someone may try and use a market value appraisal to determine the amount to pay to the homeowner. This is probably illegal in Kentucky. For more information on this go to our Insurance Bad Faith Alert! section.

Another way insurance companies cheat people on their homeowners’ losses is in how they pay for the loss of personal property. If you have replacement coverage on your personal property (furniture, clothing, electronics, appliances, etc.) your policy usually requires that you replace the property before you get payment for it from the insurance company. There is nothing wrong with this, but some insurance companies delay reimbursement so long that people cannot afford to replace any other items. Some policies require you to replace your property within 180 days, or you lose the benefit of the replacement coverage. If an insurance company delays reimbursing you for long enough, the 180 period might run, and the company may refuse to pay replacement cost for anything else. This is clearly an abusive insurance tactic that should not be allowed.

If you do not replace your personal property, then the insurance company pays actual cash value for your items. This is another area of insurance company abuse. In setting the actual cash value of your property, the insurance company applies a depreciation factor to the value of your property. For example, if your washer and dryer are destroyed and are a few years old, the insurance adjuster may claim that they have lost most of their value, and apply an excessive percentage of depreciation on them to the point that you receive little or no payment for them. If this is done to all of the property you own, you may end up with little or nothing. This can give rise to a bad faith claim.

Your insurance company is supposed to treat you fairly, and pay what it owes under the policy. It is also supposed to give equal consideration to your interests, not just its own. Unfortunately, some insurance companies approach claims with the attitude that their job is to pay as little as possible. Kentucky laws are designed to protect you from this, and the insurance company can be forced to pay for all of your damages if it treats you unfairly. Insurance abuses can also occur in other areas. For example, if you have a claim against another person’s insurance company following a car wreck, that company owes payments to you if the other driver is at fault. However, that company may take an unreasonable position on whether its driver is at fault, or on the amount of money you are owed. Sometimes the insurance company won’t communicate with you at all. They may also force you to go to court to collect when there is no real question about who is at fault, or how much you are owed. The delays in payment can keep you from getting medical treatment and paying your bills, and have other drastic consequences for you.

Some Kentucky laws may allow you to recover money damages from the insurance company for this type of illegal bad faith conduct. Any person who believes that the insurance company is being unfair to them should have their claim examined by an attorney who is an expert on the matter. If you believe that you are being mistreated by an insurance company, please contact us for a free consultation. We’d like to help.