How Do Nevada’s Bad Faith Laws Affect First-Party Insurance Claims?

• November 1 2023
• |   Insurance

DISCOVER THE IMPACT OF NEVADA’S BAD FAITH INSURANCE LAWS

Can You Challenge a Bad-Faith Denial Under Nevada Law?

Insurance companies are not always sincere and transparent in their dealings, leading to bad-faith insurance practices. These bad-faith practices carried out by some insurers undermine the primary significance of insurance; they often make policyholders vulnerable when they need support the most.

Luckily, some laws protect policyholders. For policyholders in Nevada, the state has a law that permits first-party insurance claims against insurers because of the contractual relationship between the parties. After the first-party insurance claimant makes this claim, if an investigation is carried out and it is determined that the insurer acted in bad faith, the claimant will be qualified to receive damages.

However, claimants should note that this Nevada law does not permit third-party bad faith claims, i.e., a claim you would make against another party’s insurance company. Nevada permits only first-party claims of bad faith, i.e., against your own insurance company. The law does not acknowledge any contract or contractual agreement between claimants and third-party insurers. Another thing to note is that in Nevada, errors or disputes concerning claim valuation do not constitute bad faith.

Why Hire Leverty & Associates Law to Help With Bad-Faith Claims

At Leverty & Associates Law, we know how insurance companies behave, and our experienced attorneys are not afraid to go against them. We will file the claim denial and work to get you your benefits. Contact us at (775) 322-6636 (Reno) and (702) 507-0201 (Las Vegas) to learn more about how we can help you. Consultation is free.

Our legal team can help you if you believe your insurer acted in bad faith and denied your insurance benefits.

What Is Bad Faith in Insurance?

Bad faith in insurance refers to attempts made, or tactics employed by an insurance provider to renege on its obligations to policyholders. There are many ways in which an insurance company can act in bad faith. An insurer acts in bad faith when it refuses to pay a policyholder’s legitimate claim or does not investigate and conduct the necessary procedures for a policyholder’s claim within a specified period.

Insurance companies act in bad faith when they:

• Make a list of outrageous demands for a claimant to prove a covered loss
• Fail to give potential policyholders complete information about policy limitations and exclusions before purchasing a policy
• Misinterpret an insurance contract’s language to the policyholder to avoid paying a claim.

Bad faith can be possible in every kind of insurance, from health insurance to auto insurance. If you suspect your insurance provider of bad faith, consult Leverty & Associates Law.

What Is the Impact of Nevada’s Bad-Faith Laws on First-Party Insurance Claims?

Nevada’s insurance law declares that every legal contract carries the obligation of good faith and fair dealing between the parties. If any parties fail to uphold the agreement, it constitutes an instance of bad faith. This law has helped many policyholders and saved them from the unfair treatment of insurers.

The impact of Nevada’s bad faith laws is beneficial to policyholders when insurers deny them the benefits they paid for, without a plausible reason or basis. The law reduces the chances that an insurer will renege on their obligations.

How Policyholders Can Establish a Bad-Faith Claim

If you have been denied the benefits of your policy by your insurance provider, as a first-party claimant you can establish a bad-faith claim in two ways:

• The first is to show that your insurer violated their obligation of good faith and fair dealing without a legal basis. This can be done by proving that the insurer denied or delayed payment for no satisfactory reason.
• The second way is to prove that your insurer showed careless or deliberate disregard during investigations, payment, correspondence, and, in fact, the whole claim process. When your claim is being investigated, the insurer’s actions will be compared to those in similar circumstances to determine if your claim is valid.

In Nevada, bad faith claims must be proven in court. A claimant’s word is not enough proof; claimants must show enough evidence of the insurer’s actions.

How to Make a Successful Bad-Faith Claim

Policyholders whose insurance providers have mistreated them are at risk of making mistakes which will lead to an unfavorable result in their bad-faith claim. To make a successful bad-faith claim, here are some steps to take:

Keep Records

Documentation is significant. Always keep a detailed record of your communications with your insurance company. From emails to letters and even phone calls, document the dates and names of the individuals you communicate with.

Review Your Policy

You have to understand the terms and conditions of your insurance policy thoroughly. This will help you identify whether the insurer has violated any contractual agreements.

Be Timely

If your insurance company gives a specific time period within which policyholders must report their claims, you should ensure that you meet this deadline. Delays could be used against you.

Collect Evidence

Gather enough evidence that will help you support your claim. Evidence such as photographs, medical bills, records for specific types of insurance, and repair estimates can also strengthen your case if you need to dispute a denial.

Clear Communication

Express your concerns to your insurance provider clearly, preferably in writing. Use certified mail for essential communications, as notice of receipt will come in handy as proof.

Utilize Regulatory Bodies

If your insurer remains unresponsive, file a complaint with the Nevada State Insurance Department. They supervise insurance practices and protect policyholders.

Seek Legal Assistance

Consult an attorney who knows the nuances of insurance law. We will let you know if you have a legitimate case for bad faith. If you do, we will guide and help you navigate the situation.

When pursuing a bad-faith claim, you should do it ethically and abide by the law.

Avoid dishonest dealings and seek professional and legal advice whenever you’re in doubt. Our bad-faith attorneys are trustworthy, and we can help you in your battle against unscrupulous insurance providers.

How Do Nevada’s Bad-Faith Laws Affect First-Party Insurance Claims FAQs

The following are frequently asked questions on bad faith insurance and their effect on claims:

What Is Bad Faith in Insurance?

Bad faith in insurance refers to the improper conduct of an insurance company when handling an insurance claim. It involves actions that violate the obligation of good faith and fair dealing, such as denials or claim delays without a good reason.

How Can I Recognize Bad-Faith Insurance Practices?

Signs of bad faith include delaying claims processing without a justifiable cause, denying valid claims for no good reason, offering claimants low settlements without proper investigation, or violating insurance policy terms.

Can Bad-Faith Insurance Claim Decisions Be Challenged?

Yes, as a policyholder, you can challenge bad-faith insurance practices. It may involve filing a complaint with the insurance regulatory authority, hiring an attorney, and pursuing legal action against the insurer.

What Legal Remedies Are Available for Policyholders Who Are Victims of Bad-Faith in Insurance?

Legal remedies for victims of bad-faith insurance practices can include financial compensation for the original claim, punitive damages to prevent future misconduct, and attorney fees.

Get Help From Leverty & Associates Law

At Leverty & Associates Law, we have been serving clients for over 40 years, and our experienced bad-faith insurance attorneys have successfully fought for over $150 million in compensation for our clients. Call us if you want experienced Nevada bad-faith insurance attorneys to support your fight against unjust insurance treatment. Contact us for a free initial consultation at (775) 322-6636 (Reno) and (702) 507-0201 (Las Vegas).