Insurance companies in Nevada are careful about the way that they handle claims and lawsuits. That’s because if an insurer does not act in good faith when handling a claim, the policyholder can sue for “bad faith” practices by the insurance company.
Nevada law specifies that insurers have a “duty to defend” and indemnify their policyholders against third-party claims. This means that when someone makes a claim against a policyholder for a potentially covered risk, the insurer must investigate the claim in good faith and they may even provide the policyholder with a legal defense.
What Does a Bad Faith Act Look Like?
Acts that might constitute bad faith practices by an insurer include:
- Not conducting a prompt and fair investigation of a valid claim.
- Not having reasonable standards for investigating claims.
- Misrepresenting what the policy covers.
- Failing to communicate with the policyholder regarding a claim.
- Failing to give adequate reasons for refusal to pay a claim.
- Negatively affecting the policy holder’s ability to defend against a third-party claim.
What Damages Can You Recover?
If you’re in a car accident, and you file an insurance claim for damages, your insurer has a duty to defend you against any liability claims. If the insurer breaches this duty, what can you recover?
You may be able to recover the amount that was unfairly withheld from your settlement. You also may be able to recover emotional distress damages, which are intended to compensate you for the emotional harm that comes from having one’s insurance company fail to keep its promises.
Finally, if your insurance company acted in bad faith by failing to defend your claim, you may also be able to get punitive damages. These are designed to punish the offending party—in this case, the insurer—for its behavior.
Damages for “bad faith” by an insurer can include:
- Costs of hiring a lawyer to defend the claim
- Damages for emotional distress; and
- Punitive damages (in extreme cases).
Call an Experienced Personal Injury Legal Team
If you believe that your insurance agency acted in bad faith, failing to protect you while you were an active policyholder, you may be entitled to compensation. Call Willoughby Shulman Injury Lawyers today to request a consultation and case review. Our experienced attorneys can help determine if there is cause and opportunity to sue your insurance company for bad faith practices. Call now or contact us online.