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Nevada’s Unfair Claims Settlement Practices Act Does Not Create A Third-Party Private Right Of Action

National Association of Insurance Commissioners, NAIC, Model Act, NRS 686A.310, Gunny v. Allstate, Nevada Unfair Claims Settlement Practices Act, Nevada Coverage Law, Nevada Bad Faith Law, Mills & Associates Nevada Insurance and Coverage Lawyers, Las Vegas Insurance and Coverage Lawyers 702-240-6060Nevada is one of a handful of states that creates a private right of action for violations of its Unfair Claims Settlement Practice Act, NRS 686A.310.  Subsection (2) of the statute provides that “an insurer is liable to its insured for any damages sustained by the insured as a result of the commission of any act set forth in subsection 1 as an unfair practice.”  Third-party claimants have asked whether this private right of action extends to them.  The answer from the Nevada Supreme Court is a clear no.

In Gunny v. Allstate Ins. Co., 108 Nev. 344, 346 830 P.2d 1335 (1992), the Court said that a third-party “has no private right of action as a third-party claimant under NRS 686A.310.”  This does not mean that a third-party has no remedy whatsoever.  The third-party claimant can submit complaints to the Nevada Division of Insurance.  However, the statute does not give third-parties the right to sue the insurer directly to recover damages for those violations.  Nevada does not recognize Third-Party liability for bad faith either.  See HERE for more details.

Please contact Mills & Associates with any questions you have about Bad Faith or Unfair Claims Practices Action issues in Nevada.