When you buy an insurance policy in Nevada, you enter a contract with your insurer. This contract, often lengthy and complex, outlines what the insurance policy covers. This can range from property damage to medical expenses. However, what happens when you face issues like unfair claim denials or unreasonable delays, which may be beyond the confines of the contract? This is where extra-contractual claims come into play.
What do extra-contractual claims involve?
Unlike regular insurance disputes or contractual claims, extra-contractual claims are not about what’s covered. Rather, it’s about how they handle your claim or treat you as a policyholder. These claims often involve:
- Unjustified claim denial: Your insurer must carefully look at all the facts before turning down your claim. They must have a good reason for denial, and they must explain this reason to you clearly.
- Long or unexplained delays: Nevada law mandates that insurers handle claims promptly. If your insurer takes too long with your claim, especially without clear updates, they may be acting unfairly.
- Misrepresentation of policy provisions: Your insurer should not change the meaning of policy words to avoid paying claims. If they interpret a part of the policy in a way that goes against its clear meaning, you have rights. Moreover, Nevada courts often support policyholders when policy words are unclear, following “contra proferentem,” a legal principle that favors the party who didn’t write the contract.
- Inadequate claim investigation: Before deciding on your claim, your insurer must conduct a reasonable investigation. This means collecting all important information and examining any proof you provide. Not doing so is a breach of duty.
- Consistent lowball offers: This is when your insurer repeatedly offers settlements far below your claim’s actual value without justification. They must make fair and reasonable settlement offers when liability is clear.
Under Nevada law, insurers must act in good faith and deal fairly with their policyholders. If an insurer violates these regulations, policyholders can seek damages beyond what the policy provides. This may include compensation for financial losses, emotional distress, and, in some cases, punitive damages.
Don’t hesitate to ask questions
Knowledge is your best tool in maintaining a fair and beneficial relationship with your insurance provider. If you find yourself in a situation where you believe your insurer is not acting in good faith, consider working with an attorney who can help you understand your options.
