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Combating allegations of bad faith insurance

On Behalf of | Sep 6, 2022 | Insurance Law |

In Nevada, insurance is a necessary part of daily life. The purpose of an insurance policy is for the policyholder to recover payments when they have suffered a loss. The insurance company is expected to make those payments based on the policy itself.

In some instances, the policyholder will be unhappy with some aspect of their case and say that the insurer is not behaving legally by failing to pay a sufficient amount for their loss. While the company is often perceived as the so-called “villain”, these accusations might not be valid. Companies must be fully aware of how to defend against them.

What constitutes an unfair practice in settling a claim?

Nevada law details unfair practices in settling claims. Since receiving payment or not getting an amount the policyholder believes is fair are among the most frequent complaints, knowing specifically what the law says is essential when formulating a defense.

If, for example, the claim is made for an auto accident and the estimated cost of the damage from an auto mechanic has been submitted, the insurer could be accused of using its adjusters to say the damage is worth far less. This could just be a frivolous assertion, but the insurance company must be prepared to defend against it.

The insurance company might also be accused of bad faith if the insured needs to pursue litigation to recover what they say they are owed based on the policy. This can happen in cases where the settlement is far less than what was recovered through the legal filing.

Settlements are also a catalyst for disputes and bad faith claims. If a policyholder says that the insurer sought a settlement for less than what a reasonable person believed they were entitled to as part of the insurer’s advertising or materials, this could stoke bad faith claims. Another settlement issue is if the insured says the application was changed without their knowledge or consent.

Insurance companies must mount a vigorous defense against bad faith claims

Although insurance companies are categorized as large entities with little interest in helping the “little guy,” the truth is that claims made by the insured are often simple complaints about what they received in compensation when it was perfectly reasonable based on the contract and valid under insurance law.

In some cases, it is simply a misunderstanding that can be settled through negotiation. In others, it continues through trial. Whether it is auto insurance, home insurance, life insurance, premises liability or any other aspect of insurance, the company must understand insurance bad faith and move forward with addressing the case efficiently and effectively.


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