In our last post, we began looking at the topic of bad faith insurance and the obligation of insurance companies to deal fairly with those covered under the motor vehicle accident policies they issue. As we noted, Kentucky law provides a list of business practices that can serve as the basis for bad faith insurance claims.
Whether a bad faith insurance claim is filed under Kentucky statute or common law, there are three elements that must be satisfactorily proven in any case. First, the plaintiff must be able to prove that the insurer was obligated to pay a claim under an insurance policy; that the insurer had no reasonable basis for denying the insurance claim; and that the insurer knew there was no reasonable basis for denying the claim or was reckless in determining the reasonableness of the claim.
Both first-party and third-party claimants under motor vehicle insurance policies are entitled to be dealt fairly and in good faith, and so both policyholders and third parties entitled to coverage under an auto insurance policy may initiate a bad faith claim.
In any bad faith insurance claim, a plaintiff must be able to show that there is enough evidence to entitle the plaintiff to punitive damages. Providing sufficient evidence for punitive damages in any case is not an easy matter since the burden of proof is high, and it is important to work with an experienced attorney in building the strongest possible case. When insurance issues arise in the wake of a motor vehicle accident, skilled legal counsel can work to help a plaintiff achieve a favorable resolution to the case, whether in court or in settlement negotiations.
Source: Wittmer v. Jones, Ky., 864 S.W.2d 885, 890 (1993)