Insurance companies have certain duties not only to their insureds but also to those who file legitimate claims against those who they insure.
A company’s failure to uphold these duties can result in a finding of liability under Kentucky’s bad-faith laws, but the claimant has the burden of proving his or her case by a preponderance of the evidence. This is not always an easy task, since there those involved may not agree about who is at fault or the amount of damages to which the claimant is entitled.
The Facts of the Case
In the recent case of Hollaway v. Direct General Insurance Company of Mississippi, Inc., what eventually became a bad-faith insurance dispute originated as an automobile accident involving a vehicle owned by the plaintiff and a second vehicle. (The plaintiff was a passenger in her vehicle, but someone else was driving.) The respective drivers’ accounts of how the wreck happened differed, with each blaming the other for the collision.
The plaintiff’s car was damaged in the accident, and she sought medical treatment for injuries to her back and hip. She also lost time from work, allegedly due to her inability to perform her duties because of her injuries. Although the record was somewhat unclear, the defendant insurance company (which insured the driver of the second car) apparently settled the plaintiff’s property damage claim for the full amount that the plaintiff requested, but it offered her only $5,000 in response to her demand for $125,000 in compensation for bodily injuries.
The case proceeded to trial, with the plaintiff asserting a negligence claim against the driver of the second car, an underinsured motorist claim against her own insurance company, and a third-party bad-faith claim against the defendant under the Kentucky Unfair Claims Settlement Practices Act. As grounds for her claim against the defendant, the plaintiff alleged that the defendant had failed to reasonably evaluate, investigate, and negotiate her bodily injury claim.
The case proceeded to trial on the bad-faith claim (the other claims were settled out of court), and the trial court entered summary judgment for the defendant. The intermediate appellate court affirmed.
The Kentucky Supreme Court’s Decision
The court affirmed the lower courts’ decisions in favor of the defendant, agreeing that the plaintiff had failed to present evidence that could have resulted in a verdict in her favor at trial. According to the court, the plaintiff had a duty to present both evidence of the defendant’s unreasonable failure to respond to a legitimate claim and proof that the defendant acted recklessly indifferent to the plaintiff’s right to recover.
The court noted that the defendant did eventually agree to settle her bodily injury claim for $22,500 but found that this evidence did not present a bad-faith claim under the Act.
Get Help with Your Kentucky Car Accident Claim
If you have been injured in a car wreck, it pays to have an experienced motor vehicle accident attorney by your side as you litigate the various issues that arise. Having a skilled litigator handle your case can greatly increase the chances of a fair settlement with the responsible party. To schedule a free case evaluation with a knowledgeable Bowling Green car accident lawyer, call English, Lucas, Priest & Owsley at (270) 781-6500. We serve clients in both Kentucky and Tennessee, including in Hopkinsville, Franklin, Springfield, Scottsville, Clarksville, and Nashville.
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