Dealing with insurance after an accident can be a nightmare. Insurance companies often protect their bottom line by denying coverage and undervaluing claims. You might expect things to be better with your own insurance company, but this is not always the case.
When you file with your own insurance, you can often sue them for breach of contract or even bad faith insurance if they refuse coverage. However, it is important to consider the times when your own insurance applies versus someone else’s insurance. For example, car accident cases are usually filed with the other driver’s insurance.
For help, call our Las Vegas, NV personal injury attorneys at Mitchell Rogers Injury Law at (702) 702-2622 today.
Grounds to Sue Your Own Insurance Company
An insurance policy is a contract saying when and for what reasons your insurance company will pay you. It is also governed by a standard that insurance companies must use good faith in trying to pay under the policy’s terms. Breaching either of these can lead to a lawsuit.
Lawsuits for breach of contract are usually based on mistakes or misunderstandings of the contract’s terms. Contracts are typically interpreted against their writer – i.e., the insurance company – potentially helping you if they try to wiggle out of payment.
However, many cases involve more egregious issues. Instead of pointing to the contract and coming up with arguments as to why they did not breach, insurance companies may simply ignore your claim, give you the run-around, delay communications, or even lie about cancellation.
This often shows they aren’t even trying to pay you and qualifies as “insurance bad faith.” This is separate grounds for a lawsuit.
When Can I Sue My Insurance Company?
It is important to understand that many cases are actually filed against someone else’s insurance company.
When you get injured, you typically file with the responsible party’s insurance. Think, for example, of an injury at someone else’s house or business; their homeowners or business liability insurance would cover you.
Car accidents are the most common situation where you will file with your own insurance.
Nevada is an at-fault state, meaning you still file with the at-fault driver’s insurance for injuries. However, you might have first-party benefits like comprehensive coverage, medical payment coverage, or uninsured/underinsured motorist coverage.
When you use these policies, you file with your own insurance instead. If they refuse to pay, you can then potentially sue them for coverage.
Excuses Insurance Companies Give for Bad Faith Denials in Nevada
When insurance companies commit bad faith, they don’t make it obvious. Instead, they often try to obfuscate or put up barriers to turn you away from pressing your claim. It is only through advocating for yourself – or by using our Nevada personal injury lawyers – and pressing the issue that you can discover bad faith.
Insurance companies often try to use the following illegal tactics, potentially qualifying for bad faith lawsuits:
- Wrongly claiming you are behind on payment
- Claiming your policy was canceled (often after you filed your claim)
- Denying they received your initial claim
- Denying you are the covered person
- Denying you have a policy
- Failing to respond to calls and letters
- Missing required response deadlines
- Providing basic or vague information
- Providing inapplicable excuses
- “Losing” your records
- Requiring you to re-file your claim
- Denying claims without cause
In these cases, it shows the insurance company never even tried to pay your claim.
Legal Grounds for Insurance Denials
On the other hand, there are some reasons insurance companies can legally deny your insurance claim:
Inapplicable Situation
Insurance policies are limited in what they cover. If the insurance company understands the facts correctly and claims they are outside of your coverage, they might be right.
This can often happen in car insurance claims when drivers don’t understand which coverages they have and which coverages apply. For example, your comprehensive policy covers vehicle damage outside of crashes, while collision coverage covers auto repairs after a crash but not injuries.
If they are wrong, we can take them to court for breach of contract, but pointing to a legitimate legal excuse often does not constitute bad faith.
Missing Premium Payments
If the insurance company says you are behind on paying your policy, they may be able to deny coverage.
Inactive/Cancelled Policy
If you switched policies, canceled a policy, or misunderstood the start date of your policy, it is possible you are trying to make a claim on a policy that is not active. This is reasonable grounds for a denial if it is true.
If it’s a lie and your policy is active, it often constitutes bad faith.
How Much Can You Sue an Insurance Company For?
Insurance companies are contractually obligated to pay certain amounts for your claim. This means paying the full value of your claim up to policy limits. On top of that, they may be forced to pay additional damages as a penalty.
“Punitive damages” are available in cases where the defendant’s actions were willful. Intentionally failing to pay an insurance claim in bad faith is often willful, but punitive damages cannot be awarded unless we prove that element and specifically ask for them.
Punitive damages are used to punish the wrongful party and to deter future actions. Instead of being based on how much harm was caused, punitive damages are based on how bad their actions were.
Some cases can involve punitive damages equal to double or triple the amount claimed in your case.
Can You Sue Other Parties Too?
If you were injured in a car crash, your insurance company might cover some of your damages, but the at-fault party is still on the hook for their share of damages.
You may sue the other driver, potentially recouping damages before you even need to sue your insurance company. Because the goal is to get you paid – regardless of the source – suing your insurance company for punitive damages might be a secondary concern to getting your injuries and lost wages covered in the first place.
Call Our Nevada Personal Injury Lawyers Today
Contact our Henderson, NV personal injury attorneys for a free case review by calling Mitchell Rogers Injury Law at (702) 702-2622.