Consumer Rights Under Nevada’s Insurance Code

There are approximately 6,000 insurance companies operating across the country.

These companies write policies for homes, cars, life, and health. They also make a lot of money. The top seven health insurance companies pulled in $71 billion in a single year. The property and casualty insurers earned $88 billion. That money is generated by collecting premiums and not paying claims.

That pursuit of profits often comes at the expense of the policyholder, and that is the primary reason why consumers need protection provided by Nevada’s insurance code.

Part of that protection provides the ability for a policyholder to seek compensation for bad faith practices that directly impact a viable claim payout. An experienced Reno insurance bad faith lawyer will be in the best position to provide guidance about how you can hold insurance companies accountable and get what you’re due.

It will help you to understand your rights as a consumer as they apply to Nevada insurance.

The Legal Framework of Nevada’s Insurance Code

Each state has the right to set the regulations for its insurance markets. The Nevada Division of Insurance (NRS) established the standards and procedures for each insurance carrier to follow that are spelled out in the Nevada Insurance Code. This is the regulatory authority that also sets up consumer protections for residents.

The mandatory auto coverage for state residents falls under the purview of the NRS. That law requires each driver to carry the following liability insurance:

• $25,000 for bodily injury (one person)
• $50,000 for bodily injury for two or more persons
• $20,000 for property damage

This is often referred to as the 25/50/20 rule. Car owners can purchase additional coverage, such as uninsured or underinsured motorist coverage. Those policies are not mandated.

Additional new regulations allow insurers to remove wildlife fire protection from the standard homeowner’s policy. When you consider that nearly 84% of all homes are at risk of being involved in a wildfire within the next 30 years, you can see the value of carrying this type of insurance.

These are just some of the basics of Nevada’s insurance framework. Each policy is unique to the holder and stipulates the terms and conditions that the policyholder and insurance carrier are obligated to follow.

Protection Against Unfair Claims Settlement Practices

Nevada’s Insurance Code was established to protect consumers from unscrupulous acts committed by insurance companies in their pursuit of profits.

The specific Nevada Insurance Code is found under NV 686A – Insurance: Trade Practices and Frauds. This provides clear safeguards that are intended to prevent insurance companies from deploying tactics that put your legitimate claim at risk.

The following are some of the unfair claims settlement practices that the Nevada law aims to prevent:

• Misrepresenting facts or policy provisions related to coverage
• Failing to acknowledge or respond promptly to claim communications
• Not conducting a reasonable and timely investigation
• Refusing to pay claims without conducting a proper review
• Failing to affirm or deny coverage within a reasonable timeframe
• Attempting to settle claims for less than the amount reasonably owed
• Forcing policyholders to file lawsuits to recover benefits

Although these laws are very clear about how an insurance company is supposed to operate, many still try to go around the law by claiming they are just following company protocols. That is when disputes arise, and it falls to the courts to decide how far over the line the insurance companies have gone.

Your Right to a Prompt and Fair Investigation

At the core of the Nevada Insurance Code is your right as a policyholder to a prompt and fair investigation of your claim. That would meet the standard of the insurance carrier operating in good faith.

However, there is also room for unwarranted delays and denials.

When you file a claim, the insurance carrier must acknowledge receipt of that claim within “a reasonable period of time.” That “reasonable period of time” is generally accepted as 20 days.

Once the company acknowledges your claim, it can proceed with an investigation that will typically involve these actions:

• Review of your policy coverage
• Evaluate all your damage estimates or medical documentation
• Interview witnesses when applicable
• Consult with qualified experts if necessary
• Request additional documentation when necessary

How does an insurance company operate in bad faith with the rules in place? They could wait until day 20 to respond. They might also request additional documentation as a way of “resetting” the clock. These are the types of tactics that can cause undue financial strain on you and your family.

They are also the kinds of practices that an experienced bad faith lawyer will recognize. When it can be established that the insurance company is not operating in good faith, you could be entitled to additional compensation beyond your initial claim.

Understanding Standards for Claim Denials and Appeals

An insurance company is entitled to deny a claim. Many denials are legitimate. For instance, you could make a claim for $30,000 to replace your car after an accident.

However, if you only purchased the minimum property damage coverage, the insurance company would only be obligated to pay $20,000. In that case, you would either be out-of-pocket for the balance or forced to sue the at-fault driver directly to make up the difference. At that point, the insurance company would be out of the picture.

When an insurance company does make a denial, the Nevada Insurance Code 686A.675 lays out the denial process that every insurance company must adhere to.

If your claim is denied as the policyholder, you have the right to the following:

• Receive a written explanation of the denial
• Review the policy provisions relied upon by the insurer
• Submit additional evidence or documentation
• Request reconsideration of the decision
• File a complaint with the Nevada Division of Insurance
• Pursue legal action if bad faith conduct occurred

The insurance company might allege that there are exclusions to the policy or that you provided insufficient documentation.

However, when they make those assertions, they need to be supported by evidence. If they miss key facts from your presented evidence, misinterpret their own policy, or conduct a flimsy investigation, your claim denial could be an example of insurance bad faith.

That demands a response in the form of an appeal and official complaint.

Frequently Asked Questions About Consumer Rights

What is the Unfair Claims Settlement Practices Act in Nevada?

The Unfair Claims Settlement Practices Act, codified in NRS 686A.310, is a set of Nevada laws that prohibits insurance companies from engaging in deceptive or unfair behaviors. These include failing to settle claims promptly when liability is clear or refusing to provide a reasonable explanation for a claim denial.

How long does an insurance company have to respond to a claim in Nevada?

Under Nevada law, insurance companies are generally required to acknowledge receipt of a claim within 20 days. They must also provide the necessary forms and assistance to the claimant promptly to ensure the investigation moves forward without unnecessary delay.

Can I sue an insurance company for violating the Nevada Insurance Code?

Yes, if an insurance company violates the Nevada Insurance Code in a way that constitutes bad faith, you may file a civil lawsuit. This allows you to seek compensation for the original claim amount, as well as additional damages for emotional distress and, in some cases, punitive damages.

Legal Remedies for Violations of the Insurance Code

When an insurance company violates the Nevada Insurance Code, you have rights as a policyholder to pursue a legal remedy. That starts by filing an official complaint with the Nevada Division of Insurance. If proven legitimate, the Nevada Division of Insurance can fine the insurance company and compel it to make a correction, but it can’t provide you with compensation.

That’s where the Law Office of Matthew L. Sharp can make a difference.

As an experienced Reno insurance bad faith lawyer, we have a deep understanding of the Nevada Insurance Code. We recognize the difference between an insurance company that is complying with the code and one that is operating in bad faith.

We have helped many clients pursue compensation for unfair practices by an insurance company. That compensation can include the following:

• The value of the unpaid claim
• Additional financial losses caused by delays
• Emotional distress damages
• Attorney fees and legal costs
• Punitive damages in cases of egregious misconduct

If you feel like your insurance company is giving you the run-around or denying a legitimate claim that can be backed up by evidence, we want to hear from you. Taking on an insurance company is not without challenges. Fortunately, we have a proven record of success in these types of cases and won’t back down.

Let’s discuss what is going on in a free case review.

Call to schedule your time today.