This blog writes a lot about insurance law. Indeed, in a recent post, we went over some details explaining bad faith insurance as it relates to simple mistakes. Though, in this post, we will focus on fighting bad faith insurance.
A reminder on the basics
The term, bad faith insurance, refers to when an insurance company denies a claim in bad faith. In other words, the insurance company denies the claim when they reasonably should have paid out the claim. And, bad faith insurance can occur in any type of insurance policy, including health, auto, life, homeowners’, etc.
Not just a difference in opinion
Of course, reasonable minds can differ. And, it is rather common for an insurance adjuster to have a different opinion than a policyholder on the value of a loss. That is not bad faith, if that adjuster can reasonably support their conclusions. A mistake also is not bad faith.
Duty to defend
Remember, depending on the type of insurance, the insurance company may also have a duty to defend the policyholder as well. This, usually, comes up in auto insurance claims by a third-party. The insurance company has the duty there to litigate the claim for the insured.
The first step for Las Vegas, Nevada, residents in the fight against bad faith insurance is documenting and gathering evidence of the bad faith. Look for evidence that supports a finding of bad faith, like evidence that the insurance company ignored contrary evidence, taking more than the allowed amount of time to respond to a policyholder’s claim, any evidence of negligence, etc. Remember, it is on the insurance company to explain their reasonable basis for denying a claim or for approving a claim for substantially less money.
Under Chapter 42 of the Nevada insurance code, bad faith insurance claims may qualify for punitive damages, if the policyholder can prove that the insurance company committed fraud or engaged in malice or oppressive actions. This, essentially, occurs when the insurance company has a conscious disregard of the rights or safety of others, like ignoring the harm to the policyholder because of the insurance company’s failure to investigate, reply, pay or defend the policyholder.