Sound Legal Counsel
And Strategic Representation

What makes up an insurance bad faith claim?

As an insurance policyholder in Nevada, you’d like to believe your claims will be handled promptly and fairly. But unfortunately, that’s not always the case. At times, insurance providers reject claims for spurious or unjust reasons.

If this happens to you, filing an insurance bad faith lawsuit might be an option. In essence, a bad faith lawsuit contends that the insurance provider acted improperly in rejecting or denying a claim, and if you’re successful you could be reimbursed. But filing a bad faith lawsuit requires meeting certain standards of proof.

The definition of insurance bad faith

Insurance providers make more money when they don’t pay out claims. And they generally have far more sophistication, time, financial resources and knowledge than their policyholders. So, the law protects policyholders if the insurance provider acts maliciously or unfairly.

The most common recourse for a policyholder who believes the insurance provider denied a claim improperly is to file a bad faith lawsuit alleging that the provider acted improperly.

Proving a bad faith claim

Keep in mind that insurance providers are allowed to deny claims for many legitimate reasons. Simply showing that a provider didn’t accept a claim isn’t enough to prove bad faith.

First, you must prove that you were entitled to some benefit or compensation within your policy, but this claim was rejected.

Next and most crucially, you must demonstrate that the insurance provider denied your claim unreasonably. This is usually the crux of whether a bad faith claim succeeds or fails.

Some possible ways in which a provider might act in bad faith are:

  • Not addressing a claim within a reasonable timeframe
  • Giving no explanation for denying a claim
  • Not properly investigating and processing a claim
  • Falsifying details surrounding the claim
  • Making false claims about the nature of the policy

An insurance bad faith claim attempts to demonstrate that the insurance provider rejected a claim unfairly. To prove a bad faith claim, it’s necessary to show how the provider’s practices were unjust.