Julitza Perez | Property Insurance Coverage Law Blog | May 5, 2018
The State of Nevada is known as the “Silver State” for its large silver mine industries, but it is also popular for the casinos in its largest city, Las Vegas. For property policyholders in Nevada it is important to know that the state provides statutes that protect and guide insureds during the claim handling process.
All insurers in Nevada must comply with the Standards1 that provide the statute of limitations for claim handling. Once the executed proof of loss is received, the insurer must accept or deny the claim within 30 days; notification must be given in writing and include reference on the specific policy provision, condition, or exclusion that decision was determined on. If accepted, the insurer must pay the claim within 30 days after acceptance or shall pay interest on the claim calculated from the date on which the payment is due until the claim is paid.2 The insurer must notify the claimant within 30 working days from receipt of the proof if more time is needed for investigation3 but can never delay settlement or negotiations of a claim to the extent to affect claimant’s rights under an insurance contract, policy, or statute of limitations.
The Nevada Administrative Code authorizes the use of an agent to handle the insured’s claim on behalf of the insurer.4 The agent must report all claims to the insurer on a timely manner.5 The insurer may terminate authority granted to the agent for cause upon written notice and may also suspend during the pendency of any dispute regarding the cause for termination.6 The agent shall send a copy of the claim to the insurer if requested or as soon as the agent is aware that the claim has the potential of one or more of the following:7
- Claim has potential to exceed an amount determined by the Commissioner or exceeds the limit set by the insurer, whichever is less;
- Involves a coverage dispute;
- May exceed the agent’s authority to settle a claim;
- Is open for more than 6 months; or
- Is closed by payment of an amount set by the Commissioner or an amount set by the insurer, whichever is less.
Under Nevada’s statute, “Unfair practices in settling claims; liability of insurer for damages,”8 is a detailed list of actions considered and under which the insurer would be liable to its insured for any damages caused. Many of the unfair practices described on this list are related to the insurer’s failure to comply with policy provisions, attempt to settle under unreasonable terms, or mislead the insured during the claim handling process. An insurer cannot make a practice of appealing arbitration awards in favor of insureds or claimants to compel them to accept settlements or compromises less than the amount awarded in arbitration.9 All Nevada insureds should be aware of their rights under these statutes which can help in understanding the claim handling process.
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1 Standards applicable to all insurers, NAC 686A.675.
2 Standards applicable to all insurers, NAC 686A.675 (1).
3 Standards applicable to all insurers, NAC 686A.675 (3).
4 Handling of claims which agent has authority to settle; suspension and termination of authority to settle claims, NAC 683A.510.
5 Handling of claims which agent has authority to settle; suspension and termination of authority to settle claims, NAC 683A.510 (1).
6 Handling of claims which agent has authority to settle; suspension and termination of authority to settle claims, NAC 683A.510 (3)(a)(b).
7 Handling of claims which agent has authority to settle; suspension and termination of authority to settle claims, NAC 683A.510 (1)(B)(1).
8 Unfair practices in settling claims; liability of insurer for damages, N.R.S. 686A.310.
9 Unfair practices in settling claims; liability of insurer for damages, N.R.S. 686A.310 (1)(j).