What Is The Insurance Carrier’s Legal Obligations Following A Henderson Area Car Accident?

Insurance carriers are obligated to operate pursuant to certain rules.  The statutory framework that insurance carriers must adhere to can found in Nevada Revised Statute (NRS) chapter 686A entitled Trade Practices.  Insurance carriers will never tell you what legal framework they are obligated to operate under.  But NRS 686A.310 has the following key provisions:

1. Engaging in any of the following activities is considered to be an unfair practice:

      (a) Misrepresenting to insureds or claimants pertinent facts or insurance policy provisions relating to any coverage at issue.

      (b) Failing to acknowledge and act reasonably promptly upon communications with respect to claims arising under insurance policies.

      (c) Failing to adopt and implement reasonable standards for the prompt investigation and processing of claims arising under insurance policies.

      (d) Failing to affirm or deny coverage of claims within a reasonable time after proof of loss requirements have been completed and submitted by the insured.

      (e) Failing to effectuate prompt, fair and equitable settlements of claims in which liability of the insurer has become reasonably clear.

      (f) Compelling insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by such insureds, when the insureds have made claims for amounts reasonably similar to the amounts ultimately recovered.

      (g) Attempting to settle a claim by an insured for less than the amount to which a reasonable person would have believed he or she was entitled by reference to written or printed advertising material accompanying or made part of an application.

This statutory structure does not lay out specific detailed actions they must follow, nor is it specific as to what they must do.  But, NRS 686A.310, does provide a structure and framework that can be used to push the carrier along, and move claims more quickly.  First and foremost, and insurance carrier can NEVER misrepresent anything to their insured, nor to a claimant who was injured by their driver.  Misrepresentations are clear violations of this statute. 

If you have ever found that an insurance carrier has misrepresented any facts, or insurance coverage issues to you, such a misrepresentation is a clearly violation of Nevada law.  While misrepresentations can be a huge issue for injured people, a more common problem individuals face is simply the lack of contact between the adjuster and the injured person.  They are OBLIGATED to act promptly in communicating with you, and in adopting reasonable standards for investigating and processing a claim.  These provisions are notoriously violated by insurance carriers.  They routinely fail to return phone calls, and never explain how they determined the value that they placed on your claim.  Nevada law does not permit them to leave you without a return call for days at a time.  They are not permitted to create valuation dollars for your claim that has no reasonable foundation.  Essentially what this means is that the insurance carrier must be “reasonable” and “prompt” in their interaction with you. 

What is “reasonable”? 

This is arguably the downside to Nevada’s structure in the claims process.  Technically speaking, a jury would have to make the final determination as to whether an insurance carriers’ actions were, or were not, reasonable.  Which means that how we define “reasonable” is why lawyers have jobs.  What you feel to be reasonable, and what they define as reasonable, maybe two different things.  The unfair practice statutory scheme, however, provides us with ammunition to go after insurance adjusters that do the following: 

1) fail to return phone calls 

2) fail to explain how they came up with their valuation numbers

3) they allow weeks to go by without affirming or denying  coverage

4) they attempt to offer settlement values well below an amount that a reasonable person would believe what the insured thought they were entitled to. 

These are common “tricks of the trade” that insurance adjusters seek to use on injured people that are not represented by a lawyer, because they usually do not know what the insurance carrier’s obligation is to them. 

In Nevada, an injured victim must still take reasonable steps mitigate their damages.  What does “mitigate” mean?  Mitigation in this context is to minimize the effects and loss that the has been caused and is related to his or her injuries/damages.  In James Hardie Gypsum (Nevada), Inc. v. Inquipco, 112 Nev. 1397, 929 P.2d 903 (1996) , the Nevada Supreme Court highlighted that, “As a general rule, a party cannot recover damages for a loss that could have avoided by reasonable efforts.” What does reasonable efforts actually mean? Conner v. S. Nevada Paving, Inc., 103 Nev. 353, 355, 741 P.2d 800, 801 (1987) (citation omitted). “[T]he rule den[ies] recovery for losses which could have been prevented by the . . . expenditures of plaintiff. . . .” Valencia v. Shell Oil Co., 147 P.2d 558, 561 (Cal. 1944). In order to recover loss of use damages, the plaintiff must “show diligence in getting the car repaired as early as reasonably possible.” Rownstein v. Bernhard & Turner Auto. Co., 180 N.W. 282, 284 (Iowa 1920). “[T]he trial court’s role, as trier of fact, is to determine the reasonable period of repair.” Airborn, Inc. v. Denver Air Ctr., Inc., 832 P.2d 1086, 1091 (Colo. Ct. App. 1992)).

Mitigating damages is a classic deflection attempt from insurance carriers to frustrate injured victims. They will demand that an injured person pay to have their destroyed vehicle removed from a tow yard, or pay to have their own property damage repaired.  This is most common as the injured person is told by the carrier that they are still “determining liability”, so they are unable to pay for it.  They demand that the injured victim must “mitigate” their damages.  These can be frustrating demands as the issue of whether these demands being made were, or were not reasonable, is a question for the jury.   When an injured person does not adhere to the instructions of the carrier, they can then find themselves in a fight to get compensated for the money they lost. 

The point of all of this is that insurance carriers do have obligations to injured victims.  These obligations are not expressly laid out, but they do have some structure, and these obligations are enforceable. However, any injured victim also needs to be mindful that simply because they were the victim of some other bad driver, they may still have obligations that need to be filled their claim along smoothly.  We often get clients that come to our office with the belief that the insurance carrier for the driver that hit them should take care of everything.  Yet the reality is that there is a process where, sometimes, they really do not have to take care of everything. 

Navigating the minefield that is the insurance claims process can be a tricky one, and often requires professional guidance, and/or advice.  Knowing where these obligations come from, is the first step to educating yourself on how insurance carriers have to operate when they are handling a claim that you may be involved in.  Insurance companies cannot simply do whatever they feel like.  The Nevada legislature has placed some structure to the claims process.  Knowing your rights, and the obligations of the insurance company is a crucial step in knowing how to move a claim forward, and knowing when to call out an adjuster for improper behavior.

Have You Been Involved In A Henderson Or Las Vegas Car Accident?

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