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Insurance companies face bad faith claims for auto policies

On Behalf of | Mar 24, 2021 | Insurance Law |

Insurance companies are often viewed in a negative light. It is the nature of their business that allegations of wrongdoing, bad faith, failure to adhere to policies, breach of contract and more will come up. For Nevada insurance companies, it is important to understand how to defend against claims that they mistreated customers in any way. In some cases, circumstances will play a role in policyholder’s allegations that they were not treated fairly by the company. Lodging a defense or negotiating a settlement often requires experienced and professional guidance.

Auto policyholders claim insurers operated in bad faith

The ongoing health crisis has sparked dramatic changes in the way people live their lives. Many believe they are entitled to a reduction in their auto insurance payments because of driving fewer miles. This has been the catalyst for a class-action legal filing in Nevada against many insurance companies. According to the complaint, policyholders say they should be compensated by the companies because of profits accrued due to fewer drivers, fewer accidents and fewer claims. Statistically, there was as much as a 70% decline in traffic in certain locations. The insurance premiums, however, did not reflect this.

The class-action case argues that with reduced risk of collisions, insurers were collecting roughly the same insurance premiums while policyholders were not in need of the insurance as they were before. The most prominent names in the auto insurance industry are named in the case. In responses to the lawsuit, some of the insurers said they did issue paybacks to customers and defended their business policies. It is unknown how many people will take part in the case. The goal on the part of the plaintiffs is to recover for premiums and to receive future rate adjustments.

Insurance companies should vigorously defend against bad faith claims

Insurance law can be confusing and the companies themselves are a common target of negativity. Still, before immediately reacting as if the company behaved inappropriately and took advantage of policyholders, it is wise to understand the facts. Companies should lodge a strong defense against accusations of bad faith. Having assistance to craft a defense or to discuss a settlement can be crucial to achieve a satisfactory outcome.


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