Imagine your insurance company deliberately denied your valid claim just to save money. Infuriating, right? In Nevada, punitive damages exist for these situations. They punish insurers who choose profits over promises. Yet, getting these damages creates a frustrating challenge for policyholders.
The uphill battle
Regular compensation just covers your losses. Punitive damages are different. You must prove the insurer’s misconduct with “clear and convincing evidence.” This means showing they knowingly did wrong. It is not about proving a mistake. It is about proving deliberate wrongdoing.
Nevada’s two-tiered damage caps
Nevada has a two-tiered system for punitive damages:
- Damages under $100,000: punitive damages cannot exceed $300,000
- Damages of $100,000 or more: cap is three times your compensatory damages
These caps do not always apply. If the insurer acted with “intent to defraud,” the caps may disappear. This means that truly deceitful insurers might face unlimited punitive damages. This helps deter the worst industry practices.
Where is the line?
When does tough claims handling become punishable? Nevada courts look for “oppression, fraud or malice.” This line is not always clear. Your denied medical claim might feel malicious to you. But legally, it might only qualify as an “aggressive business practice.”
The Nevada approach
Nevada courts now look at patterns of behavior, not just individual actions. If your insurer systematically delays claims to improve their financial reports, judges increasingly view this as potential evidence of malice—even without anyone personally disliking you.
If you believe your insurer has crossed from tough negotiating into bad faith territory, consulting with a Nevada insurance attorney may help determine if your case warrants pursuing punitive damages beyond just your original claim amount.
