Insurance Bad Faith

WHAT IS INSURANCE BAD FAITH?

Individuals and businesses purchasing insurance in Nevada are entitled to the financial and legal protection for which they have paid. They purchase insurance to protect themselves against a variety of financial risks and exposures, including:

• Automobile insurance to protect against the risk of claims and lawsuits by others (liability insurance) and to pay damages that the insured may suffer (medical payments, collision coverage, and uninsured motorist coverage)
• Disability Coverage, both long-term and short-term, to protect an individual in the event they become disabled and are unable to work
• Homeowners insurance to protect against the risk of losing a home and its contents as well as also protection against financial exposure of claims by anyone who may be injured on the property
• Business insurance to protect from claims made against the business, protection from losses due to the interruption of the business’ operations and protection against loss of business assets. 

Insurance Bad Faith happens when an insured party’s insurance company fails to pay claims or fails to provide the legal defense entitled to them under their insurance policy. When this happens, claimants and insureds suffer and often have the right to file a lawsuit against the insurance company for bad faith.

DO YOU HAVE A BAD FAITH CLAIM AGAINST AN INSURANCE COMPANY?

Bad Faith Claims

Every insurance contract between the insured and the insurer is an inferred obligation to act in good faith. Nevada’s courts have defined the relationship between insurance companies and their policyholders as fiduciary, meaning the relationship requires engaging in trust and good faith and upholds the obligations required under contract. Generally, insurance bad faith constitutes delaying, withholding, or denying the policyholder benefits that are based on legitimate claims filed under valid insurance policies.

Insurance companies must:

• Pay or deny the claim within a reasonable period of time. 
• Provide prompt response to their questions and concerns. 
• Not unnecessarily delay the adjustment of the claim or require unreasonable paperwork as a means of extending the claim period.
• Explain the reason for denial and the policy provision supporting so if a claim is denied. 
• Maintain their obligation to protect the insured by timely settling a valid claim rather than subjecting an insured to an excessive liability judgment. 

Liability Insurance Claims

In liability insurance, the insured buys protection from claims and lawsuits by others for the insured’s negligence. When the insurer fails to pay or denies the claim in bad faith, the insured suffers not only the covered loss, but also the threat of considerable financial exposure. For this reason, the recovery for bad faith in the liability context is broader, and compensation is often greater.

The courts have indicated that bad faith may be a dishonest purpose, implied conscious wrongdoing and even negligence. When the insurer fails to settle the claim of an injured person on behalf of its insured due to its own negligence, fraud or bad faith, then the insurance company may be liable. The jury must consider whether the insurer has given the insured the same faithful consideration it gives its own interests.

WE’RE HERE TO HELP

Lawyers Terry Friedman and Julie McGrath Throop are experienced in helping with bad faith medical claims in Nevada. It’s an actionable wrong when the insurance company breaches contractual duty to act in good faith. If the insured has suffered damages at the hands of their insurance company, compensation through a lawsuit may be awarded. Different types of compensation may include:

• Legal Fees
• Unpaid claims
• Mental suffering and emotional distress
• Punitive damages

WHAT TO DO NEXT

The bad faith failure of an insurance company to meet its obligations under the insurance policy can have devastating consequences for an individual or business. If you believe you may have a bad faith insurance claim in Nevada, we can help you get the answers and justice you deserve. Call Friedman & Throop Law at 775-322-6500 today.