How to Tell If Your Insurance Company Acted in Bad Faith

Filing an insurance claim can be equally stressful and intimidating. If you’re filing a claim, it’s because you’ve suffered significant injury or personal property damage. That in and of itself is stress-inducing.

When you add in the challenges of presenting evidence to an insurance company in the hopes of getting quickly reimbursed for your out-of-pocket expenses, it is understandable that you might feel overwhelmed.

That scenario is worsened if your insurance company acted in bad faith.

When an insurance company operates in bad faith, it means they are engaging in unfair practices under the guise of what they consider to be normal business practices. If you feel as though you’ve become the victim of these practices, you owe it to yourself to speak with a qualified Reno insurance bad faith attorney.

That attorney will be in the best position to help you determine if you should file a complaint and seek compensation. First, you need to determine if your insurance company acted in bad faith. Here’s what to look for:

Unreasonable Delays in Claim Processing and Payment

One of the most common tactics deployed by an insurance company that is acting in bad faith is to delay the entire process. The Nevada Insurance Code is very clear about how an insurance company is supposed to act, but that doesn’t always prevent the carriers from trying to move the goal posts.

What constitutes an unreasonable delay? Consider the following:

Constant Stalling

Under Nevada law, an insurance company is obligated to acknowledge receipt of your claim within 20 business days. That is just the acknowledgement, as in, “We got your claim.” They could wait until day 20 to make that acknowledgement and then start the investigation. That is nearly a month of you waiting, which is unfair.

Repetitive Information Requests

Your insurance company can delay by asking for documents that you have already submitted, or that might not be relevant. Each request allows them to extend the process because they now have to “review.”

Failing to Communicate

When an insurance company ignores your phone calls, emails, or texts requesting an update, it can be considered an unfair delay.

Switching Adjuster

You will be assigned an insurance adjuster to investigate your claim. If the insurance company switches the adjuster, the new adjuster will have to “start over,” which can cause further delays.

It is understandable to expect some delays, especially if you’re making a claim for something like a wildfire, along with hundreds of other policyholders.

However, you shouldn’t be subjected to deliberate stalling that is designed to maximize the insurance company’s profits.

Inadequate Investigation of Your Valid Insurance Claim

An insurance company is not just going to take your word about what happened in an accident. That is especially true if they represent the alleged at-fault party. The insurance company could fail to conduct a thorough investigation by ignoring your evidence or interviewing only one person.

The insurance company might also rely on its own expert witnesses who offer only a superficial opinion of the accident. That can work against your best interests.

Lowball Settlement Offers and Misrepresentation of Terms

When you submit a claim, you hope it will be approved, and your reimbursement will be sent out immediately. It’s understandable that you would be eager to accept the first offer of a settlement because it would mean money in your account. Unfortunately, when a lowball offer doesn’t cover the true costs of your losses, it can create further financial burdens.

Is a lowball offer an example of bad faith? It can be if the insurance company compounds the issue in the following ways:

Final Statements

The insurance company might claim that “this is the best we can do,” when in fact, it isn’t.

Failure to Justify

If you’re presented with a low settlement rate without any reason as to why it is low, that is acting in bad faith.

Unwarranted Pressure

Once you’re given an offer, the insurance company can begin to pressure you to accept. They know that you’ll be signing a waiver against further action, which is why they want you to accept.

Your settlement offer needs to cover all your current and future expenses and pain and suffering. An experienced attorney will help calculate your damages in pursuit of the maximum benefits you’re entitled to based on your policies.

What to Do If You Suspect Bad Faith Practices

If you think your insurance company has been acting in bad faith, there are proactive steps to take to protect your claim. It’s very common for insurance companies to hope you’ll get so frustrated with the process that you’ll give up or accept that lowball offer.

That shouldn’t happen when you have a legitimate claim.

If you suspect you’re the victim of bad faith practices, you want to document every interaction you have with the company representative and insurance adjuster. You’ll want to keep copies of all your emails, letters, texts, and any supporting documents you submit.

You also want to maintain a call log of any phone conversations. That log should include the time, date, person you spoke to, and details of the conversation. You can also ask to record the call, so you have a complete transcript.

It’s also vital to request written explanations for any delays, denials, or settlement offers.

The Nevada Insurance Code requires insurers to provide clear and reasonable justifications for their decisions.

Once you have all that documentation, it is time to discuss what happened with a Reno insurance bad faith attorney. The Office of Matthew L. Sharp can analyze your initial claim and the insurance company’s responses. We are familiar with all the bad faith tactics and have experience knocking them back one by one.

If you think your insurance company is not following the Nevada Insurance Code or you’ve been wrongfully denied a claim, we want to hear from you. You can schedule a free case review that will give us the opportunity to look over your documents and answer questions about what your viable options might look like.

Call or contact us online to schedule today.

Frequently Asked Questions About Insurance Bad Faith

What is the most common sign of insurance bad faith?

The most common sign is an unreasonable delay in communication or payment. If your adjuster stops responding to inquiries or fails to provide a decision within the time frame required by Nevada law, they may be acting in bad faith.

Can a denied claim be considered bad faith?

A denial is not automatically bad faith if the insurer has a legitimate, evidence-based reason. However, if the denial is based on a misinterpretation of the policy or a failure to investigate the facts, you may have a legal claim for bad faith.

How do I prove my insurance company is acting unfairly?

Proving bad faith requires showing that the insurer lacked a reasonable basis for their actions and knew (or recklessly disregarded) that they lacked such a basis. Documentation of all interactions, including emails and letters, is critical evidence in these cases.