While it is common for property insurance policies to contain suit limitation provisions (similar to statues of limitations) that prohibit the insured from filing suit against the insurance company unless the suit is filed within one or two years of the loss, jurisdictions vary on the types of claims that can be barred.
A district court in Nevada recently held that a one year suit limitation in a contract did not apply to bad faith claims or UCPA (Unfair Claims Practices Act ) claims, but instead only to breach of contract claims against the insurer. According to the court, the bad faith claim is not to be barred because the obligation to deal in good faith is not something that arises from the contract, but instead from the law itself. Additionally, the UCPA claim is not barred because, like bad faith claims , liability is created by law and not by contract.
What is Insurance Bad Faith in Nevada? When an individual enters into a policy with an insurance company, the two are said to be under contract. The law requires that the insurer act in “good faith” toward the policyholder. In the state of Nevada, statutes and regulations exist to protect policyholders from their insurers. When an insurance company wrongfully denies a valid claim from their policyholder, the company is said to be acting in “bad faith” and a bad faith claim, also known as a “breach of the implied covenant of good faith and fair dealing claim” can be filed.
To achieve success with a bad faith insurance suit, the following elements must be proven.
You have an insurance contract with your insurer. You filed a claim with the insurer. The claim was covered by the policy. Your insurer acted unreasonably with knowledge of its unreasonable conduct in handling your claim. You were injured because the insurer didn’t pay your claim or delayed in paying claim. Unfortunately, it is common practice for insurance companies to attempt to deny claims for any reason possible. Many times, when an insurance company admits to a claim or lawsuit being covered under the policy, it may attempt to pay inadequate compensation for the damages incurred. Other examples of bad faith include but are not limited to:
Failure to thoroughly investigate a claim in a prompt manner Delaying payment Unreasonably interpreting policy language Refusing to settle a claim 
