How Much Is a Bad Faith Claim Worth?

Insurance companies are supposed to provide financial support when an accident or other tragedy occurs. Given the meteoric rise of insurance prices over the past couple of years, as reported by National Public Radio (NPR), it would be reasonable to expect that insurance companies are holding up their end of the expensive bargain.

However, not all insurance companies act in good faith when investigating or paying out a claim. Far too often, they look to cut corners, delay payments, and generally fail to comply with their duty of good faith and fair dealings.

In these cases, policyholders have the legal power to take action and file what is known as a bad faith claim to secure the financial compensation and damages they are owed.

If you believe that your insurance company failed to meet legal standards — in most cases, this means failing to promptly pay a covered claim, conduct a fair and complete investigation before denying a claim, or providing detailed factual and legal reasons for why a claim was denied — then you may be able to file a bad faith claim. But what kinds of damages could you potentially recover?

How Much Can I Recover in a Bad Faith Claim?

The value of each bad faith claim, just like any other lawsuit, is highly dependent on a number of factors. Once you hire a bad faith insurance lawyer you can trust, they will work with you to dig through the details of your situation to get a clearer picture of what damages you will be able to seek. In the vast majority of cases, what you can recover can be broken down into three categories:

• Contract Damages: This category covers the amount that should have been paid out through your original claim, plus any insurance accrued since it should have been paid out. For example, if your car was totaled and you should have been paid the full $50,000 value for it, then your contract damages will total $50,000 plus interest.
• Extracontractual Damages: This category covers any losses, economic or non-economic, caused by the insurance company’s bad faith actions. Some of the damages this can cover include attorney fees spent litigating the suit, emotional stress caused by the denied or delayed payments, additional medical bills caused by a delay in treatment through denied claims, and more.
• Punitive Damages: In some cases, the insurance company’s actions can be deemed so egregious that additional damages may be added to your verdict. These damages are typically levied against insurance companies in order to punish and prevent them from taking similar actions in the future. There are no set limits on how much punitive damages can be awarded in Nevada.

In short, a bad faith claim is typically worth the initial claim that should have been paid out, plus interest, additional costs directly caused by that failure of payment, and in egregious cases, potentially considerably more.

However, each case is highly dependent on a number of factors that need to be determined by working closely with your lawyer.

If you are looking to file a bad faith claim, it’s important to work with a law firm you can trust. Reno bad faith insurance attorney Matthew L. Sharp has dedicated his career to providing his clients with dedicated and diligent legal representation to fight for and secure the compensation they are owed.

Contact us today to discuss your case and learn more about the next steps you can take.