State of Nevada Sues Insurance Company for Bad Faith

State of Nevada Sues Insurance Company for Bad Faith

Officials in Nevada have filed a lawsuit against an insurance company that they say refused to assist with the payment of legal defense settlement costs in another case. The Nevada Attorney General’s Office filed the lawsuit, alleging breach of contract along with bad faith.







No Payout for the State of Nevada

Attorney General Adam Laxalt claims that a $400,000 settlement to the city of San Francisco along with around $2.5 million in defense costs was not paid by their insurance company. The state argues that the legal costs that go above their $2 million deductible should be covered. The state has paid millions of dollars in premium payments over the last 13 years without receiving a payout and Mr. Laxalt has said in a statement that this bad faith lawsuit should speak for any Nevadan who has ever been stiffed by an insurance company.

An official date for a trial has not yet been set in this case. In 2013, the city of San Francis sued the state of Nevada, saying that they bused psychiatric patients to California after being discharged from a Nevada hospital before confirming if they had a support system in place. This was the city’s way of recouping the cost of caring for around 24 individuals, which they claimed cost around $500,000.

Insurance Companies and Bad Faith

Insurance companies are obligated to show their customers good faith. This includes timely payouts of appropriate claims, within the terms of an insurance policy. The interests of the policyholders should be held in regard at least equally to the insurance company’s interests. When an insurance company fails to consider the best interests of their policyholders, a bad faith lawsuit may be filed. Some insurance companies have failed to pay for legitimate claims to individuals and companies that should have been covered, according to the terms included in a policy. Insurance companies are required to pay in a timely manner and not intentionally delay an investigation. Insurance companies must also pay fair market value for a claim. A policyholder may be entitled to seek the counsel of an attorney and pursue financial compensation for any damages that were caused by the bad faith conduct of an insurance company, such as those described.