In Las Vegas, becoming a customer of an insurance company means you are entering a contract in which both parties have agreed to work together. Unfortunately, some insurance companies do not act with good faith when processing claims. They will do anything to deny claims and not honor their policy.
You can sue an insurance company that engages in such behavior. You have been denied an insurance claim. Contact an attorney to learn how they can assist you. Read on to find out more about what constitutes good faith and bad faith insurance actions and what you can take.
A contract between an insurer and insured is an insurance policy
According to Nevada law, when you sign your name on an insurance policy it begins a contract with your insurance company. As long as you pay the premiums on time, your insurer will honor their contract. If an accident occurs, and it is covered under the policy, then you can submit a claim for processing to your insurer.
If the insurance company agrees with your policy, it will pay out the claim. It’s business as usual, both for you and your insurer. This shows that they are acting in good faith towards their policyholders. Insurance companies follow a doctrine known as utmost-good-faith, which ensures they act in a fair and honest manner.
What is the role of an insurance company in processing a claim?
You expect your insurer to pay for a claim in accordance with the terms of the contract when you file a claim. The insurance company must respond in good faith if you have made payments on time.
You may have had a falling tree limb create a hole in your roof. The policy of your home insurance states that they will cover the cost of repairs for roof damage caused by a tree branch falling. The damage is covered by your insurance policy, so you file a claim. The insurance company accepts your understanding of the coverage and helps you to make arrangements for the repair and payment of contractors’ materials and labor. The insurance company in this case is acting in accordance with its policy and in good faith.
Acting in good faith includes:
- In a reasonable time, pay out claims.
- Provide legal defense to a policyholder in the event of a claim by a third party.
- Settle claims according to the law or contract terms.
- Honesty and honesty with the policyholder.
- Payment of claims on time.
Your insurance company can deny your claim while acting in good faith
Insurance companies can deny your claim for valid reasons and still say they are acting in good faith. It could be that you submitted a mistaken claim, did not report it in a timely manner, or that the service was not covered by your policy. It is possible to appeal the claim or ask for a review in order to receive coverage. However, success is not guaranteed.
You and the insurer are both parties to an insurance contract. You must follow the policy rules in order to have your claim successfully processed. The insurance company will act in good faith by following the policy you both agreed upon.
When an Insurance Company Acts In Bad Faith
Insurance companies are considered to have acted in bad faith if they knowingly deny valid claims and give denial reasons which are not in line with their policy. Although an insurance company can deny a claim for any reason, it must be a good one. If consumers pay their premiums without any reason, they are violating the spirit of contract laws.
Some of the actions that are considered bad faith include:
- Deny the claim knowingly and force the policyholder to go to court.
- Misrepresentations made with knowledge to the insurer.
- Failing to conduct a thorough investigation of the facts surrounding the claim.
- A claim that is settled for less than its worth.
- The failure to pay benefits due the policyholder.
- Do not delay in processing your claim.
You’re dealing with a bad-faith insurer if you’ve encountered any of these problems or feel like the insurer is using excuses to delay your claim or deny it outright.
Why would an insurance company act in bad faith?
Insurance companies are profit-making organizations. Insurance companies are in business to earn profits for their investors and to be able pay for the operation. If an insurer’s profitability starts to decline, they will need to reduce costs in order to stay open. Insurance claims are the biggest drain on an insurer’s finances.
If an insurer is facing financial difficulties or simply wants to save money, they will do everything possible to maintain their cash flow. The insurer has to find ways to delay or deny claims, as they are the biggest drain on its financial liquidity. The insurer may be able to justify its denial in some cases, but not all. The insurer will still try to deny a claim, even if it is written clearly.
Insurance companies can maintain their profitability by denying claims.
When an insurance company acts in bad faith, what should you do?
Call the lawyers at Leverty & Associates Law if you believe that your insurer is trying to stop you from filing a claim. The lawyers at Leverty & Associates Law will review the details of your insurance policy and claim in order to determine if your insurer has acted in bad faith. We are not afraid to hold insurance companies accountable for their actions. This shows other insurers there are consequences when they make poor decisions for profit. Contact us to set up a consultation to learn more about your legal options.
The article What happens if your insurance claim is denied in Las Vegas? first appeared on Attorney at Law Magazine.