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What happens when an insurance company is unfair to you?

Insurance is something that is often emphasized as a necessity for any citizen. Investing in different policies such as homeowner’s, health and life insurance is crucial towards protecting yourself in the event of an emergency. However, it is a complicated topic that not many people fully understand. Unfortunately, some insurers take advantage of this by withholding claims or manipulating the insured.

These are known as acts of bad faith insurance. Each state has specific laws on how residents can deal with insurers that act in bad faith to their clients. Most rely on the model Unfair Claims Settlement Practices Act (UCSPA), but it is not the same in every state. Nevada residents should be aware of the Silver State’s unique laws towards unfair insurance claim practices before taking their issues to court.

How Nevada’s laws differ

Why Nevada’s USCPA is similar to the National Association of Insurance Commissioners (NAIC) typical practices towards unfair claims, there are a couple of ways it sets itself apart. One of the main differences is that Nevada allows for first-party claimants to have a private right of action. It is one of only ten states to authorize it. This means that a private person has the ability to sue a defendant for violating specific laws against the USCPA.

Additionally, the NAIC Model Act states that the insurer only creates a citable violation if they committed it flagrantly, consciously or did it so often it became general business practice. Nevada’s UCSPA does not feature the frequent general business practice violation, so some believe that simply committing one of these acts once is enough for a violation. However, the statutes do include some plural language to imply that some actions may require more than a single act to count as a violation.

Examples of unfair practice

Unlike the common laws towards bad faith in most states, Nevada’s Unfair Practices Act lists specific actions that insurers can commit which the state finds to be unfair. Though some of these are the same as the common law towards bad faith, residents should familiarize themselves with the state’s restrictions so that they can see if there are additional or excluded actions. Some of these activities include:

  • Failing to inform the claimant on proper insurance policy provisions
  • Not executing reasonable standards towards claim investigations
  • Trying to settle a claim for a less than reasonable amount
  • Not informing the claimant of the beneficiaries of the coverage
  • Continuously delaying the investigation of the claim by requiring the claimant to sign an obscene amount of forms
  • Trying to prohibit the claimant from seeking legal counsel

An insurer that acts in bad faith can be highly detrimental no matter what type of damage you are trying to recover from. If you believe the company is guilty of insurance bad faith of insurance malpractice, an attorney can help you develop a strategy to earn back what you rightfully deserve.