How to File a Bad Faith Insurance Claim

Suppose your insurance provider violates contractual obligations to you. In that case, they might be acting in bad faith. You can file a bad faith insurance claim against negligent insurance companies to recover associated damages, as well as additional compensation. Because complicated regulations and Nevada laws are frequently set up to benefit the business that signed the agreement, rather than the policyholder, it can be challenging to demonstrate that an insurance company handled your claim in bad faith. A bad faith insurance lawyer can guide you through the legal process and help you achieve a favorable outcome in your case.

Filing a Bad Faith Insurance Claim
Bad faith insurance is when an insurer fails to comply with its implied covenant of good faith and fair dealing to customers by refusing to pay a policyholder’s valid claim. When an insurance company is determined to have acted in bad faith, they are typically obliged to pay you both what they should have provided you with in the first place and potentially thousands of dollars in fines to make up for the legal fees and difficulty they caused you.

Additionally, you might be entitled to punitive damages from insurance companies when their representatives’ actions were egregiously negligent or harmful.

Although every judgment is unique, speaking with a lawyer could help you better understand the damages you could recover when you file a bad faith insurance claim.

What Is Bad Faith Insurance?
When you purchase an insurance policy, you also buy security and safety. Knowing that your insurance provider will support you if a covered incident occurs is crucial. You might be eligible to file a bad faith lawsuit if an insurer willfully rejects a claim for unfair justifications or without carrying out an adequate inquiry.

Examples of Bad Faith Insurance
Not every charge of bad faith involves insurance firms flatly rejecting claims. For instance, an insurer that makes you complete a ton of utterly pointless paperwork to submit your claim, or whose unreasonable delays in rejecting, approving, or paying out on a claim may be the target of a bad faith lawsuit. Insurance firms employ these strategies to exhaust you and keep you waiting until you, ideally, give up on seeking a settlement. Occasionally, they attempt to avoid paying the entire eligible claim amount by offering a low settlement.

Another act of bad faith insurance occurs when you are sued for a vehicle accident or other harm, and your insurer declines to stand up for you. How long car accident settlement negotiation takes varies in every case. However, in many cases, your insurer must pay for an attorney to defend you if you are charged with causing an injury. They are protecting their own wallets and earnings instead of yours when they refuse to cooperate and try to force you to go it alone.

When an insurer declines an offer to settle within the policy limits and puts their client at risk of bankruptcy or being turned over to collectors, they are breaching their duty under the insurance contract and behaving in bad faith. Liability insurance is supposed to shield people from having to pay for injuries they contributed to out of their own pockets.

These scenarios could lead you to file a bad faith insurance claim against the insurance provider you paid for. Unfortunately, there is a lot of opportunity for interpretation between what the insurance company considers “fair” and what you believe to be acceptable. A bad faith insurance attorney can be of assistance here. An attorney with experience handling bad faith lawsuits can assist in demonstrating that the insurer acted unfairly and without basis for its requests, denials, low valuation, or holds.

What Rights Do I Have If My Insurance Acts in Bad Faith?
A contract between you and the insurance provider governs your insurance policy. When you need to make a claim and comply with the policy’s conditions, the insurance company agrees to pay up to the policy amount you bought in exchange for a monthly premium from you.

You have every right to file a bad faith insurance claim and sue the company for the money you are entitled to if they fail to keep their end of the deal. If the insurance firm commits wrongdoing, Nevada law stipulates penalties, which may include rewards for legal fees.

What You’ll Need to Prove a Bad Faith Insurance Claim
One blatant instance of bad faith is when your insurance company rejects a legitimate claim and won’t explain why. However, it’s not always so easy to file a bad faith insurance claim. Your assertion must first be supported with evidence, which can be difficult in and of itself. There are steps claimants and their attorneys can take to secure evidence supporting a bad faith insurance claim.

Go Over Your Insurance Contract
The contract between you and the insurer is known as an insurance policy. If your contract has been broken, you must first determine whether to file a bad faith insurance claim.

Get a copy of the complete form of your contract to review first. Make sure the date is from before your claim was filed. Get a copy of your policy before submitting your claim, if possible. Verify that your claim is covered under the contract’s provisions.

Also, pay attention to the restrictions on when and where claims may be submitted. Some insurance providers want immediate notice and legal action within a year or fewer.

Keep Logs and Assemble Evidence for Your Claim
You must demonstrate the accuracy of your initial claim and that it complies with your insurance policy’s provisions. To do this, assemble all of your supporting documentation before you file a bad faith insurance claim. This can contain any documents you’ve given the insurance provider, such as pictures, reports, receipts, estimates, and correspondence.

Keep a record of all conversations and meetings with the insurance provider. Take note of the occasion’s date, participants, and general topics of discussion. Particularly important is evidence demonstrating that the insurance company’s repair or replacement estimates were inaccurate to the property’s value. Get everything down on paper.

Document the Claim’s Denial
Ask an insurance company supervisor to evaluate the claim and denial if your claim is rejected. Consider appealing to Nevada’s insurance regulatory agency, a state organization tasked with examining contested insurance claims, if the decision is not overturned. Your insurance may change its mind about denying coverage throughout the review process.

Record every conversation you have with the insurance provider and everything they say about the denial.

Make a Final Demand
You must demonstrate that you made an effort to resolve your claim before filing a lawsuit. Send a formal letter outlining your claim as a demand. Use a return receipt to obtain proof of mailing.

From the date you issued a demand, the insurer has between 15 and 60 days to pay that claim. If the claim is not fairly and promptly paid, let the insurer know that you plan to file a claim for bad faith.

You cannot file a bad faith insurance claim before the time allotted for the insurer to respond has gone by, unless the insurer refuses to pay the claim within that time.

Submit a Complaint to the Insurance Department of Nevada
Nevada has an insurance department that oversees insurance providers and how they manage claims.

You can register a complaint with the state’s insurance department if you feel your claim has been handled improperly or haven’t received a timely settlement. The Nevada Division of Insurance is where you can submit a lawsuit and a complaint. However, carrying out both would restrict the state’s ability to look for a compromise through mediation.

File a Lawsuit Alleging Bad Faith
It is difficult to bring a bad faith claim against an insurance provider. You must choose whether to file in a federal or state court. Additionally, you must pick a court with jurisdiction over the defendant’s insurance company.

There’s a good chance that your complaint may also make additional allegations, like fraud, breach of contract, and carelessness. You should pursue damages for the insurance company’s bad faith as well as compensation under the terms of the policy. You may continue to pursue your bad faith case even if the insurance provider decides to settle the claim.

Don’t Allow Insurance Companies to Harass You When You File a Bad Faith Insurance Claim
Nevada has regulations that guard consumers against bad-faith insurance practices. A claim you are pursuing on your own may seem like a losing battle. You can fight back against an insurance company that has harmed your claim by using bad-faith practices with the assistance of a skilled attorney. A bad-faith insurance attorney can assist in demonstrating the legitimacy of your claim and obtaining the compensation you are due.