How To Know When You Can File an Insurance Bad Faith Claim

Published on August 11, 2023, by Law Office of Matthew L. Sharp

Insurance Bad Faith

How To Know When You Can File an Insurance Bad Faith Claim
You paid your insurance premiums on time, every time. And now that you need help with your claim, the insurance company is being anything but cooperative. So how do you know when you can file an insurance bad faith claim?

If your insurance claim has been denied or you think you’re being treated unfairly, an insurance bad faith lawyer from our Reno office can talk you through your options.

Key Highlights:

  • Every insurance company has a duty to treat policyholders fairly.
  • Many insurers choose to unfairly deny claims—a practice known as bad faith.
  • You have legal options if your case was handled in bad faith.

The Insurance Company’s Duty

Your insurance company has a legal duty to treat you fairly and to act in good faith when handling claims. Unfortunately, many of us have come to expect very little from our insurers. No matter how much we pay in monthly premiums for auto liability coverage or health insurance, we’re often left without help when we need it the very most.

To better understand whether you might be dealing with insurance bad faith, let’s first establish the duties that your insurance company is required to uphold.

Your insurance company’s duties include:

  • Disclosure of available insurance coverage
  • Broad interpretation of insurance policy to identify coverage
  • Investigation and evaluation of claim with intention of identifying reasons to pay the claim
  • Compliance with the Nevada Unfair Claims Practice Act

And most importantly, your insurance company has a duty to never deny a claim unless it has a good faith basis to do so.

Your insurer also has a duty to respond to requests for information or communication in a timely manner. It is their responsibility to ensure that you are up to date on the details and status of their investigation into your claim. This is supposed to be a non-adversarial process, so there’s no reason for them to withhold critical information from you.

You should always expect the representative or claims adjuster you speak with to be polite, truthful, and forthright with details.

Your Duty as a Policyholder

As an insured customer, your duty is to cooperate with the insurance company. This involves reasonably assisting them as they investigate your claim. Examples include making your home available for an inspection for a homeowners insurance claim, submitting medical records during a medical insurance claim, or providing a copy of the accident report as evidence in a car accident claim.

In other words, you must be prepared to provide evidence of your claim. You’ll need to thoroughly document your losses, including medical expenses, lost wages, injuries, and more.

Your duty largely involves being cooperative with the insurance company’s investigation, including supplying documentation as requested.

Your duty to the insurance company does not include:

  • Fielding repeated requests for information or documentation that you’ve already provided
  • Providing a recorded statement
  • Answering questions without the guidance of your lawyer

As a consumer and policyholder, you have rights when dealing with the insurance company. Don’t let your insurer’s use of “legalese” or overly complicated jargon scare you from standing up for your rights.

If you’ve been injured in a car accident, are dealing with damage to your home, need preapproval for a medical procedure, or are seeking disability benefits but the insurance company is giving you the runaround, you need help.

The Law Office of Matthew L. Sharp has the resources and experience needed to hold even the biggest insurance companies responsible for their actions.

Top 5 Signs of Insurance Bad Faith

You’ve done everything within your power to uphold your responsibilities as a policyholder. But it doesn’t seem like the insurance company has any intention of upholding its duty as your insurance provider.

Here are the top five signs that your insurer is engaging in bad faith practices:

  1. Your claim was denied without a good reason.
  2. Your claim has faced repeated delays during the investigation.
  3. You were offered an unreasonably low settlement.
  4. The insurance company has made unreasonable requests for unnecessary documentation.
  5. Payment on your claim has been repeatedly delayed.

If at any point you suspect that you are not being treated fairly, you are entitled to bring your concerns to the insurance company. You have the right to:

  • Ask questions about the details of the decision
  • Offer additional information or documentation
  • Provide evidence that your insurance policy covers your claim

How To Determine if You Can File a Bad Faith Insurance Claim

The insurance industry is well-known for shrouding itself in complex language, confusing contract clauses, and multiple layers of bureaucracy. These are just some of the factors that make it so difficult to know when you can file an insurance bad faith claim.

No matter what, don’t rely on the insurance company for answers. Their priority isn’t helping—it’s making money.

The most effective way to determine whether you have grounds to file a legal claim for bad faith insurance is to speak with a lawyer who has experience holding insurance companies accountable for their actions. A lawyer from the Law Office of Matthew L. Sharp will be able to review the details of your insurance claim, relevant evidence, and the details of the denial to determine whether you have cause to file a claim.

Our law firm also has the knowledge and background needed to identify every important detail in your case, including the exact coverage afforded by your policy, the validity of your initial insurance claim, and the bad faith actions committed by your insurer.

Work With a Law Firm That Cares About What You’re Going Through

Founding attorney Matthew L. Sharp has spent 30 years standing up for people who have been wronged by big insurance companies. In all that we do here, we prioritize the needs of our clients. Because when we take on a case, it’s personal.

Ready to learn more about when you can file an insurance bad faith claim? A free case consultation with an actual attorney is just a call or click away.