Is insurance bad faith increasing in Las Vegas?  Are insurance companies intentionally committing bad faith insurance practices in Las Vegas?  Good questions.  To answer them, one must look at the evidence.  Due to the economy or other business considerations insurance companies have drastically reduced the amounts of money they are willing to pay on injury claims. I have seen it in my practice.  I have heard it from other Las Vegas attorneys.  And, I have heard it from attorneys from around the United States.

It appears that many insurance companies have decided to reduce the amount of money they will offer to settle injury claims.  In many cases, despite clear liability, well documented injuries and treatment, and documented wage losses, the insurance companies refuse to offer adequate compensation.  In many instances, amounts below the medical expenses incurred by the injured person.

What does the fact that insurance companies are refusing to offer adequate compensation mean to you?  It depends upon your circumstances.  If you are the injured person, it means that you will have to file a lawsuit in order to receive adequate compensation for your medical expenses, lost wages, and perhaps pain and suffering.  That means you will have to hire a lawyer.  It further means that you should do your homework before you hire a lawyer.  You cannot rely on the “I’ll get you a settlement and keep you out of court” type of lawyer to protect your interests.  If you do, you will get a pennies on the dollar settlement.  The lawyer and the doctors will get all of the money and you will come away with virtually nothing for your time, effort, troubles, aggravation, injuries, treatment, stress, loss of income, and I can go on and on.  It means you will have to get involved in a lawsuit that could take anywhere from 6 months to more than two  years to get resolved.  The insurance companies know that all the while they will get to keep money that is rightfully yours in their bank accounts and draw interest on it so that by the time the case is over, they may come out virtually even.

If the insurance company is your company and you hit someone, the insurance companies may also be placing you at risk.  If an offer is made to settle the claim against you and your insurance company refuses to settle the claim, you could become personally responsible for any amount of a jury verdict that is in excess of your insurance policy.  For example, if you have a minimal policy in Nevada ($15,000/30,000) and your company refuses to settle a policy limit settlement offer, and the value of the claim is well above the minimal policy limits, you may become responsible for the payment of any amount awarded by a jury above your policy.  In such a situation, you insurance company may decide to pay the entire verdict amount.  If it does not, you then may have a bad faith case against your own insurance company for subjecting you to the adverse jury verdict.

Another situation that is creating a number of bad faith insurance practice claims is in the area of uninsured/under insured motorist coverage.   Your company should evaluate your claim for uninsured/under insured motorist coverage in a manner so that your interests are at least equal with the interests of the company.  However, many insurance companies are adjusting your claim in the same manner it adjusts third-party claims.  In other words, in the same manner it adjusts claims with parties it has no contract with and no obligation to treat fairly.  If your company refuses to fairly adjust your claim, it is acting in bad faith.

While the insurance companies may be holding onto their money in the short term, the question is whether they are making wise financial policy decisions in the long term.  In a bad faith insurance case, not only will an insurance company have to pay the actual damages it has caused or for its breach of contract, the insurance company may be subjected to punitive damages.  In some instances the amount of punitive damages could be significant.  If the insurance carriers are held responsible for the payment of numerous punitive damage verdicts in the future, their short sighted goal of holding onto as much money as possible at your expense may cost them in the long run.

This entry was posted on Saturday, February 20th, 2010 at 3:29 pm and is filed under Insurance Bad Faith. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.