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Kentucky Unfair Claims Act Settlement Practices | Property Insurance Law Team Blog



The tragic tornadoes tearing through Kentucky and the Midwest this weekend will result in significant insurance claims. The policyholders are in need of immediate adjustment and payments of money to mitigate the blow. Kentucky has a very strong general policy for dealing with claims in good faith, as set out in its Unfair Claims Settlement Practices Act (USCPA). facts. to fail to act reasonably immediately on communications with respect to insurance claims, and not in good faith to attempt to carry out prompt and equitable settlements. 1) Distortion of relevant facts or insurance regulations regarding the insurances in question;

(2) Failure to acknowledge and act reasonably immediately on communications with respect to claims arising under insurance; standards for rapid investigation of claims arising under insurance; [1

965900] 3] (4) Refuse to pay claims without conducting a reasonable investigation based on all available information;

(5) Failure to confirm or deny coverage of claims within a reasonable period of time after proof of loss reports has been completed; [19659003] (6) That int in good faith seek to enforce prompt, fair and equitable settlement of claims where liability has become reasonably clear; which was finally recovered in the action brought by such insured persons;

(8) part of an application;

9) Attempt to settle damages on the basis of an application that has been changed without notice to, or knowledge or consent of, the insured;

(10) Make claims payments to insured persons or beneficiaries that are not accompanied by a statement indicating the coverage under which payments are made; insured or injured party for the purpose of compelling them to accept settlements or compromises lower than the amount awarded in arbitration;

(12) Delaying the investigation or payment of claims by requiring an insured, injured party or they file a preliminary claim and then require the submission of formal proof of loss forms, both of which contain essentially the same information;

(13) Failure to settle claims immediately, where liability has become reasonably clear, under (1)

(14) Failure to immediately provide a complaint with a reasonable explanation of the basis of the insurance policy in relation to facts or applicable law for the rejection of a claim or for an offer of a compromise solution; coverage for a person subject to an external audit in accordance with KRS 304.17A-621, 304.17A-623 and 304.17A-625;

(16) Knowing and intentionally failing to comply with the provisions of KRS 304.17 A-714 in the collection of overpayments from suppliers; or

(17) To know and knowingly fail to comply with the provisions of KRS 304.17A-708 on the settlement of payment errors and retroactive refusal of claims.

According to Kentucky's UCSPA, an insurance company must act in good faith. 2 The Charter is "intended to protect the public from unfair trading practices and fraud.". 3

There are some other issues that deal with property claims to consider:

  • Insurers and agents shall not distort or conceal from first-party applicants any relevant benefits, coverage or other provisions in any insurance policy. 095, Section 4, first paragraph.
  • Every insurer shall, after receiving notification of a claim, within 15 days acknowledge receipt of the notification if payment is not made within this time period. 806 KAR 12: 095, § 5 (1). [19659021] An insurer shall confirm or deny all liability for receivables within a reasonable time and shall offer all payments to be paid within 30 calendar days of receipt of the receipt proof of loss. 806 KAR 12: 095, § 6 first paragraph a).
  • If the insurer needs more time to decide whether a first-party claim should be accepted or rejected, it shall notify the first-party applicant within 30 calendar days of receiving the proof of the loss, stating the reasons why more time is needed. 806 KAR 12: 095, 6 § 2 a). If the investigation remains incomplete, the insurer shall send 45 calendar days from the date of the first notification and every 45 calendar days thereafter send a letter to the first applicant stating the reasons why additional time is needed for the investigation. 806 KAR 12: 095, § 6 (2) (b).

People buy insurance without knowing if they will use the product. They rightly expect the insurance company to keep its promise and provide immediate payment of losses. The "moment of truth" for real estate insurance companies in Kentucky is right now.

Thought For The Day

Soon after, I returned home to my family with determination. to get them to live in Kentucky as soon as possible, which I appreciated as a second paradise, at the risk of my life and fortune.
—Daniel Boone
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1 KRS 3204.12-3230 .
2 Davidson v. Am. Freightways, Inc. 25 S.W.3d 94, 100 (Ky. 2000).
3 State Farm Mut. Car. Ins. Co. v. Reeder 763 S.W.2d 116, 118 (Ky. 1988).


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