Is Only Paying a Partial Claim Considered Insurance Bad Faith?

The only reason to start a business is to earn profits and expand the customer base. That holds true for insurance companies. Although they profess to be there for their policyholders when they need them, they are always focused on the bottom line. They only make money if they continue to collect premiums without paying out on claims.

Unfortunately, when an insurance company opts not to pay out a claim, it acts in bad faith, which can be actionable. Although it might seem straightforward, it can be complex because it won’t be the insurance company’s first time. They’ll have their excuses locked and loaded.

That’s why you need to speak with the Law Office of Matthew L. Sharp. We are not intimidated by insurance company lawyers and have successfully gone after many carriers for their bad faith practices. You might be the victim of this practice and not be aware it’s even happening. After all, wouldn’t an insurance company know best? Is only paying a partial claim considered insurance bad faith?

The following post can help explain what the concept of insurance bad faith is all about.

What is Considered a Bad Faith Insurance Claim?

An insurance policy is a form of a business contract. Those contracts must follow the regulations under Nevada law. The basis of that law is that each party to a contract is obligated to honor the terms of that contract. Failure to do so would be considered acting in bad faith.

The following are some of the many actions that would constitute a bad faith insurance claim:

• Delaying your payment
• Offering a settlement that is significantly less than the claim is worth
• Creating a burden with paperwork needed for claim approval
• Denying obvious liability
• Intentionally misleading a policyholder about the policy terms
• Ignoring the person making the claim
• Failure to justify the reason for a claim denial

At the opposite end, there are many ways that an insurance company can act in good faith, including the following:

• When they pay the fair amount for losses covered by the policy
• Conclude the settlement process in a reasonable timeframe
• Defend the policyholder against third-party claims
• Settle claims as provided by the law

What Can You Recover in a Bad Faith Case?

Insurance companies engage in bad faith tactics for one simple reason: They think they can get away with it because many folks are intimidated by an insurance company denial letter or a settlement that the insurance company claims is their “final offer.” That’s why you want to align with an experienced attorney who knows what bad faith looks like and what you are entitled to.

If you and your attorney prevail in establishing that the insurance company acted in bad faith, you could be entitled to the following damages:

Breach of Contract

A breach of contract is a violation of the agreed-upon terms. For example, an insurance policy could have a liability amount of $25,000 for personal injury. If your medical bills exceed that amount, at the very least, you should receive the entire amount.

A Tort Claim

You and your attorney can make a tort claim on the original breach of the contract. A tort is “damage caused by negligence.” In this case, negligence would be the insurance company’s responsibility.

The tort claim can help you recover two or more times the original claim amount.

Attorney’s Fees

If it’s proven that the insurance company acted in bad faith, you would be entitled to recoup any attorney fees associated with the case.

Emotional Distress

While the original claim could have covered your out-of-pocket expenses, these cases also have an emotional component. The fact that you had to go through these struggles to get what you were entitled to can cause a lot of anxiety that you don’t deserve. You should be compensated for that.

Punitive Damages

Punitive damages are meant to punish the insurance company for its bad faith actions and serve as a deterrent for other insurance companies.

Proving Your Claim with the Right Legal Help

Proving your claim of bad faith requires a two-pronged attack. You need to establish how another party’s negligence injured you. You also have to establish that the insurance company did not honor the policy. The Law Office of Matthew L. Sharp has extensive experience working on both sides of this type of claim.

We are extremely familiar with all Nevada insurance laws and have experience investigating crimes from every angle. If you believe that an insurance company is not honoring its policy, we want to hear from you.

Call to set up a consultation to discuss what happened and how we can help.