Insurance companies in Nevada use many devices and strategies to avoid paying claims for property damage and personal liability. Some of those tactics have been labeled by the Nevada Legislature as “unfair practices in settling claims.”
As enumerated in the statute, sixteen different actions are labeled as unfair practices. This post does not have sufficient room to list and explain all sixteen practices, but a summary of the more important practices will provide a sense of what kind of claims are considered “unfair.”
- Misrepresenting to insureds or claimants pertinent facts or policy provisions; This provision imposes a duty of truthfulness on the insurer;
- Failing to act reasonably promptly in communicating with respect to claims; An insurer cannot unreasonably refuse to take action on a claim.
- Failing to adopt and implement reasonable standards for the prompt investigation and processing of claims or failing to affirm or deny coverage within a reasonable time after a claim has been filed;
- Failure to effectuate prompt, fair and equitable settlement of claims in which the insured’s liability has become reasonably clear;
- Delaying the investigation or payment of claims insured’s physician to submit a preliminary claim report and then requiring a subsequent proof of loss form, both of which forms contain substantially the same information;
- Failing to settle claims promptly, where liability has become clear under one section of an insurance policy in order to influence settlement under another portion of the policy;
- Advising the insured not to seek legal counsel;
- Misleading the insured or claimant regarding the applicable statute of limitations.
These statutory sections impose on insurers a duty to act in good faith when dealing with claims under the police at issue. An insurer cannot delay taking action or make false statements to either an insured or a claimant. More importantly, an insurer cannot misstate or misrepresent any material fact when dealing with an insured or a claimant.
An insured will face serious financial penalties and liability for damages to the insured if it breaks any of these rules. Anyone who believes that they have been the victim of one or more fraudulent claim handling acts by their insurer may wish to pursue a bad faith claim, but before embarking upon such an arduous journey, consultation with an experienced insurance attorney would be a sound precaution.
