Most people think insurance companies will step up to the plate and do the right thing after a loss. After all, a customer secured what they thought was a comprehensive insurance policy and paid their premiums on time. Shouldn’t these actions provide the protection they paid for in the event of a catastrophic event, or extend legal representation if another party sues you, or offer proper retribution on a valid claim? Absolutely.
Simply put, insurance companies aren’t in the business of paying out claims. They're in the business of collecting premiums and providing as little compensation in return as possible.
Your Rights to Insurance Good Faith Conduct
Primarily, coverage policies are just a contract between you and an insurance company. Without fail, these contracts are complex documents riddled with confusing legal jargon. They’re also filled with terms and conditions that must be strictly complied with before an insurer will accept coverage for a claim. Without a competent attorney to hold an insurance company accountable, its business model is designed to exhaust all methods to devalue or even deny a claim.
However, in Kentucky, an insurance company has a duty to deal fairly and in good faith with its customers or anyone who makes a claim against its customer’s policy. If an insurer fails to do so, it can be held liable for monetary damages in excess of the policy limits due to bad faith conduct.
Prompt Action in Insurance Claims Makes a Difference
It’s only common sense to believe that since your contract is with the insurance company, everything will be handled between you. But what happens when there’s a dispute? Here are two examples of when professional legal advice matters in your claim resolution process.
Most insurance policies require the holder to provide notice of a loss or claim within a certain period of time. Our legal team recently encountered a client with a leaky roof and a policy that outlined a six-month reporting period. A roofer identified the cause as hail damage. Although the client contacted their insurance company within weeks of first noticing the leak, their claim was denied on the basis that the most recent hail event in the area occurred eight months before the leak was noticed.
Instead of immediately seeking legal advice, the person waited—without realizing the policy terms required them to file suit within one year from the date the insurer denied the claim. They approached our firm more than a year after the denial. Unfortunately, there simply wasn’t much we could do to help at that point.
Now here’s an example of a better outcome. One of our clients owned an apartment building and hired a contractor to replace its roof. The contractor incorrectly tarped the roof after removing the shingles, and heavy rains caused hundreds of thousands of dollars in damage. Our client’s insurance company denied coverage, stating the damage was caused by a third party he hired and thus, he’d have to recover damages from the contractor. After carefully reviewing the policy, we determined our client’s insurance company was correct and filed a claim against the contractor’s insurance company.
The contractor’s insurer employed a common tactic of acknowledging coverage but fighting bitterly on the claim value. Luckily, our client contacted one of our attorneys on the day of the loss and carefully followed advice that made it virtually impossible for the company to force acceptance of a low-ball settlement offer. After intense and fact-specific negotiations, our client received a significant amount of money that covered his building’s damages.
Uphold Your Insurance Rights
If you suffer a loss you believe should be covered by an insurance company, don’t let your rights to a good faith negotiation be trampled. The attorneys at Skeeters, Bennett, Wilson & Humphrey have the knowledge to tell you whether there is coverage for your claim and the experience necessary to make sure the insurer accepts responsibility for it.