Receiving a denial letter from an insurance company after you've been injured can be incredibly frustrating and disheartening. It's important to remember that insurance companies are for-profit businesses, and their primary goal is to protect their bottom line by paying out as little as possible on claims. A denial is often just their first move in a negotiation, not the final word on your case. You have the right to fight back.
Common Reasons for Claim Denials
Insurers will use a variety of reasons to deny a claim, some legitimate, some not. Common reasons include:
- Disputing Liability: The insurer claims their policyholder was not at fault for the accident.
- Comparative Negligence: They argue that you were more than 50% at fault for the accident, which would bar you from recovery under Nevada law.
- Policy Exclusions: They claim the specific type of accident or injury is not covered under the policy.
- Lapsed Policy: They allege the policy was not in effect at the time of the accident due to non-payment.
- Pre-existing Injuries: They argue that your injuries were not caused by the accident but were from a pre-existing condition.
- Delay in Seeking Treatment: They use any delay between the accident and your first doctor's visit as "proof" that you weren't really injured.
What is "Bad Faith" Insurance?
In Nevada, insurance companies have a legal duty to act in "good faith and fair dealing" with their own policyholders and with third parties making claims. This means they must conduct a prompt and thorough investigation and cannot deny a claim without a reasonable basis. When an insurer denies a valid claim without a legitimate reason, or uses deceptive or unfair tactics, they may be acting in "bad faith."
Examples of bad faith tactics include:
- Failing to conduct any investigation at all.
- Unreasonably delaying the processing of your claim.
- Misrepresenting the facts or the terms of the insurance policy.
- Refusing to make a reasonable settlement offer when liability is clear.
If an insurance company has acted in bad faith, you may be able to file a separate lawsuit against them, in addition to your original personal injury claim. In a bad faith lawsuit, you can seek not only the original value of your claim but also additional damages to punish the insurer for their misconduct. An experienced personal injury attorney can evaluate your denial letter and the circumstances of your claim to determine if the insurer acted in bad faith.