Low Ball Offers
The term "low ball offer" means an offer that is significantly below the fair value of an asset. In the case of an insurance claim, when an insurance company makes a deliberately low estimate of the value of your claim and refuses to negotiate fairly, they are in violation of Kentucky's Unfair Claims Settlement Practices Act.
Kentucky law requires insurance companies to exercise good faith by dealing fairly with policy holders and others making claims for benefits. If you have had a valid claim reduced for no good reason, you may be able to file a lawsuit against the insurance company for "bad faith". Although "bad faith" is the most commonly used term used in describing these claims, it is a misnomer. In order to prevail, the insured claimant need only prove that the insurance company acted with a reckless disregard for the claimants rights. They need not show "bad faith" or some type of evil motive.
These claims can arise in a number of settings, including:
personal injury claims after car wrecks;
property damages claims;
disability claims;
and claims for medical bills.
Insurance companies realize that individuals who have these types of claims are often distraught about their situation and therefore vulnerable. Sometimes they attempt to take advantage of claimants and exploit this vulnerability by using unfair settlement tactics to make low ball offers. As a claimant or policyholder, you may be able to sue for the emotional distress caused by the insurance companies, and in some cases, for punitive damages.
The basis for these claims comes from the Kentucky legislature and can be found in the Kentucky Revised Statutes. Following is an excerpt from the Kentucky Unfair Claims Settlement Practices Act:
304.12-230 Unfair claims settlement practices.
http://www.lrc.state.ky.us/KRS/304-12/230.PDF
It is an unfair claims settlement practice for any person to commit or perform any of the following acts or omissions:
(1) Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue;
(2) Failing to acknowledge and act reasonably promptly upon communications with respect to claims arising under insurance policies;
(3) Failing to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies;
(4) Refusing to pay claims without conducting a reasonable investigation based upon all available information;
(5) Failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed;
(6) Not attempting in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear;
(7) Compelling insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by such insureds;
(8) Attempting to settle a claim for less than the amount to which a reasonable man would have believed he was entitled by reference to written or printed advertising material accompanying or made part of an application;
(9) Attempting to settle claims on the basis of an application which was altered without notice to, or knowledge or consent of the insured;
(10) Making claims payments to insureds or beneficiaries not accompanied by statement setting forth the coverage under which the payments are being made;
(11) Making known to insureds or claimants a policy of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration;
(12) Delaying the investigation or payment of claims by requiring an insured, claimant, or the physician of either to submit a preliminary claim report and then requiring the subsequent submission of formal proof of loss forms, both of which submissions contain substantially the same information;
(13) Failing to promptly settle claims, where liability has become reasonably clear, under one (1) portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage;
(14) Failing to promptly provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement; or
(15) Failing to comply with the decision of an independent review entity to provide coverage for a covered person as a result of an external review in accordance with KRS 304.17A-621, 304.17A-623, and 304.17A-625.
Call us at 877-KYJUSTICE or contact us online to obtain a free assessment of your insurance needs and claims.