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Insurers Beware: Bad Faith Claims
Things seemed to be going better for insurers on bad faith claims in Kentucky after the case of Hollaway v. Direct General Insurance in September of 2016, which clarified the stringent standards for third party bad faith claims. Bad faith law in Kentucky took another turn, however, with the Kentucky Supreme Court case of Indiana Insurance Co. v. Demetre¸ which upheld a $3.425 million verdict against Indiana Insurance Company. What makes this case even more challenging for insurers is that Indiana Insurance paid the claim AND defended the insured in court, proving that bad faith can still be found even where the insurer substantially performs as required.
