Bad Faith claims against a person’s insurance company occurs when the insurance company isn’t negotiating fairly with its customers. These claims are often when someone feels they are not getting a settlement offer that’s close to what it should be, or sometimes used when someone feels their insurance company isn’t paying a claim that it should. Insurance companies are legally required to negotiate fairly – in good faith – with its customers.
It’s hard even for an experienced attorney to prove exactly what a valid bad faith claim is. How do you prove a person’s, or company’s, intention? Such cases demand an experienced attorney.
A recent Kentucky Court of Appeals case helped set standards for bad faith claims. The case of Samantha Hollaway v. Direct General Insurance Company of Mississippi Inc. involves a parking lot collision in Lexington, Kentucky. Hollaway alleges another driver backed out of a parking spot and hit her; the other driver says Hollaway hit him. Hollaway received a check for damages to her car from Direct General, which amounted to less than $500. She also wanted $125,000 in medical damages, or up to the limit of the other driver’s insurance policy. The insurance company reviewed the case and offered $5,000, based on medical records that indicated she had some damage to her back but she also had pre-existing back problems. The insurance company indicated it was not sure if the damages were the result of the accident or were from previous problems.
Hollaway was not satisfied with the offer, and instead filed suit against the other motorist and Direct General. The insurance company offered Hollaway $22,500. Hollaway filed a bad faith claim against the company. Her argument was that she was not offered the higher amount until she filed suit and that the insurance company negotiated in “bad faith” with her.