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Inappropriate insurance claims delays could constitute bad faith

Insurance offers peace of mind and valuable protection against unpredictable circumstances. When people purchase policies, they negotiate the amount of coverage that they carry to offset their liability and risk of losses. For many people, insurance simply remains a form of theoretical protection. They never need to make a sizable claim because they never experience a significant covered loss.

If there are incidents that lead to major financial setbacks, people often struggle with the claims process. They don’t know what to expect or how to assert their rights. Insurance companies may take advantage of that by acting in bad faith. Bad faith insurance practices aim to diminish the company’s liability at the expense of policyholders.

Instead of upholding the policy in good faith, the company tries to avoid paying the claim or minimize what someone receives. The professionals at insurance companies use a variety of tactics to trick people out of the coverage they deserve. Inappropriate delays for claims are one form of bad faith insurance practices. Nevada state statutes actually require a relatively prompt response from an insurance company.

What is the standard claims timeline?

People never know when something might go wrong and leave them in need of costly repairs or alternate accommodations. Their insurance policies can help cover those costs once the company approves their claim. Dragging out claim processing is one way to frustrate people into not following through with getting what they deserve.

State law gives insurance companies 80 working days or approximately three months to settle major claims. A company has 20 days after receiving initial notice about the claim to send the policyholder the specific proof of loss forms that they need to complete.

Then, the company has another 30 days to make a decision after the policyholder returns the completed paperwork. Finally, after making a determination, the insurance provider has another 30 working days to pay the claim in full.

If the insurance company violates that timeline at any stage in the process, then that might constitute bad faith insurance practices. Particularly if multiple delays eventually result in a low settlement offer or other attempts to avoid paying a policyholder, it may be necessary to take legal action.

In bad faith insurance cases, the courts can hold insurance providers accountable for refusing to uphold their policies. While people should not have to take legal action to secure a service they have long paid for, the ability to go to court can help protect people when they are in need of practical support when the unacceptable occurs. As such, learning more about bad faith insurance practices and Nevada law can be beneficial for those worried about how insurance professionals have responded to their claims.