Strategies, Challenges, and Answers

A Breach of Nevada’s Unfair Claims Settlement Practices Act Does Not Amount To Bad Faith Per Se

Good Faith Gone Bad In United States Fidelity & Guaranty Co. v. Peterson, 91 Nev. 617, 540 P.2d 1070 (1975) the Nevada Supreme Court allowed a common law action by an insured against his insurer for a breach of the implied covenant of good faith and fair dealing, commonly called “bad faith”. In order to sustain a bad faith claim, the plaintiff must prove that: 1)   The insurer denied or refused to pay an insured’s claim; 2)   The insurer had no reasonable basis to deny or refuse to pay … [Read more...]

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

Nevada 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 … [Read more...]

Insured Claimants Have A Private Right Of Action Against An Individual Nevada Licensed Independent Adjuster For A Violation Of The Nevada Unfair Claims Settlement Practices Act

Nevada's Unfair Claims Practices Act (NRS 686A.310(2)) creates a private right of action against an "insurer" for violations of the act.  Adjusters might believe that when Plaintiffs allege Unfair Claims Practice that they can point to the "insurer" as the only party who must answer for their violations.However, independent adjusters would be mistaken in their belief.Nevada Licensed Independent Adjusters are familiar with NRS Chapter 684A.  That is the section of the law that details … [Read more...]

Many Nevada Judges Allow UM / UIM Breach Of Contract And Extra-Contractual Causes Of Action To Proceed Simultaneously In The Same Suit

Some states require policyholders to complete the litigation over the contract portion of a UM / UIM claim before a bad faith or unfair claims practices action can commence. Blanchard v. State Farm Mut. Auto. Ins. Co.,575 So.2d 1289, 1291 (Fla.1991) National Sav. Life Ins. Co. v. Dutton,419 So.2d 1357, 1362 (Ala.1982), Lexington Ins. Co. v. Royal Ins. Co. of Am.,886 F.Supp. 837, 841-42 (N.D.Fla.1995).  Some states obligate the policyholder to go through arbitration before the bad faith claim … [Read more...]

Must An Insurance Company Immediately Pay The “Undisputed Amount”?

Our insurance company clients have asked the following question: “Where a first-party claim is involved, does the carrier have to immediately pay the claimant the amount at which the carrier values the claim?  Or can it in good faith refuse payment until the parties reach a resolution of the dispute as to value?”  The answer to that question always starts with a review of the regulations. Nevada Administrative Code 686A.675 reads as follows: 7.  Except for a claim involving health insurance, … [Read more...]