- August 13 2018
- | Insurance
It depends on what the claim is about but in a typical insurance bad faith case, we would see the following types of damages.
Damages for Property Loss (Economic Damages)
If it’s a homeowner’s claim, fire, or some kind of catastrophic loss, or property loss, it depends on the amount of damages at the time of the loss.
Damages for Emotional Distress (Non-Economic Damages)
In addition, if it can be proven that the insurance company acted in bad faith, the insured may seek emotional distress damages and delay damages.
Emotional distress damages relate to the mental anguish suffered by the insurance policyowner caused by having to deal with the insurance company and its bad faith conduct. Having had a loss for which you need to make an insurance claim is already a stressful situation, and if the insurance company is engaging in abuse and delaying the claim for anunreasonable amount time, that adds to the stress.
In Nevada, there is a statute that says an insurance company has to accept or reject claims within a certain period of time, from the time the claim is given to the insurance company.
If they don’t accept or deny the claim within that timeframe, then they must continue to ask for additional time every 30 days, and the insurance company is required to state why it needs the additional time. If the delay are unwarranted, there may be additional damages on that delay.
If the insurance company has acted with fraud, malice and/or oppression, then the insured can get punitive damages in addition to other damages awarded. This means that in addition to the insurance claim damages, delay damages, and emotional distress damages, the jury may assess punitive damages against the insurance company to punish the insurance company and to get the insurance company to correct its behavior.
Q: What are particularly egregious case examples that would justify a claim for punitive damages?
You see a lot of insurance companies citing exclusions in their insurance policies, whether the exclusion is applicable or not to the claim, in an attempt to get out of paying for the injuries, property loss, etc.
We see this quite often with insurance companies that they won’t even talk about, mention, or even quote an exception to the exclusion. In such a situation, the insurance company is misrepresenting its insurance policy to their insurers in order to get out of paying the claim.
Another example we see quite often is purposeful delay where the person who bought the policy (the “insured”) will submit a claim for a loss and provide all of the required paperwork. Then the insurance company will say they need additional time to review the paperwork. Then 30 days may pass and the insured will contact his or her insurance company and ask about the status of the claim. The insurance company might say they need something else from the insurer and even though you give it to them right away, another 30 days will pass.
To further delay paying the claim, sometimes the insurance company will ask for the same information over and over again. That’s considered purposeful delay. Insurance companies not only have time on their side, but they also have all the money and resources, while the individual who has gone through a catastrophic event is suffering and badly needs the money. The insurance companies are using their power to force them to either accept a smaller settlement or using the delay to make interest on the money they owe to insured.