Understanding Bad Faith Insurance in Nebraska
Insurance is a contract of utmost good faith. In Nebraska, this principle means both you and your insurer have a legal obligation to deal with each other honestly and fairly. When you pay your premiums, you rightfully expect your insurance company to uphold its end of the bargain: to thoroughly investigate your claim and provide a prompt and fair payout if it’s covered.
A bad faith insurance claim arises when the company breaches this duty. It’s not merely about a denied claim; it’s about the unreasonable conduct of the insurer in the process. Nebraska law recognizes both common law (court-made) and statutory bad faith claims, primarily under the Nebraska Unfair Insurance Claims Practices Act.
Common examples of bad faith insurance tactics include:
- Unreasonable Delay: Purposely dragging out the investigation and claims process without a valid justification.
- Failure to Investigate: Refusing to look into a claim adequately or ignoring evidence that supports your case.
- Lowball Offers: Making settlement offers that are significantly lower than what the claim is objectively worth, often despite clear evidence.
- Denial Without Explanation: Denying a claim without providing a reasonable explanation based on the policy language.
- Misrepresenting Policy Language: Intentionally misinterpreting or misstating the terms of your policy to avoid payment.
- Failure to Communicate: Not responding to your calls, emails, or letters in a timely manner.
The Unique Challenges of Proving Bad Faith in Nebraska
Proving an insurer acted in bad faith is a steep uphill battle. Nebraska courts have established a high bar for plaintiffs. You cannot simply show that the claim was denied. You must provide clear and convincing evidence that the insurer’s conduct was not merely a mistake or negligence, but was knowing and unreasonable.
The insurer is allowed to dispute a claim, deny a claim, and even make mistakes, as long as it has a reasonably legitimate basis for its actions. The core question in any Nebraska bad faith case is: Did the insurer have a fairly debatable reason for its denial or delay?
If your claim is “fairly debatable”—meaning reasonable people could disagree about whether it should be paid—then the insurer’s denial likely will not constitute bad faith, even if it’s later found to be wrong. This legal standard makes navigating a bad faith claim incredibly complex. An experienced attorney understands how to build a case that demonstrates the insurer’s actions went beyond disputing a fairly debatable claim and crossed into unreasonable, malicious, or vexatious conduct.
How a Nebraska Bad Faith Insurance Lawyer Builds Your Case
A specialized lawyer doesn’t just file a lawsuit; they conduct a meticulous forensic investigation to prove the insurer’s bad faith. Their work begins the moment you hire them.
1. Comprehensive Case Evaluation and Strategy:
Your attorney will first obtain your complete insurance policy and all correspondence between you and the company. They will analyze the precise language of your policy to confirm coverage exists. They will then review the insurer’s actions—every letter, every email, every note in the claims adjuster’s file—to identify specific violations of Nebraska’s unfair claims practices laws. This initial review forms the strategic roadmap for your entire case.
2. Mastering the Claims Process and Documentation:
Lawyers understand the internal procedures insurers are supposed to follow. They know how to force the company to adhere to its own guidelines and state regulations. They will manage all communication, ensuring a professional and documented record. This prevents the insurer from taking advantage of an unrepresented policyholder and eliminates the stress of you having to deal with adjusters directly.
3. Conducting a Powerful Investigation:
To overcome the “fairly debatable” standard, your attorney will gather overwhelming evidence. This includes:
- Securing Expert Opinions: Hiring independent experts (e.g., engineers, doctors, contractors, forensic accountants) to provide objective analyses that directly contradict the insurer’s lowball assessment or flawed reasons for denial.
- Litigation Discovery: Once a lawsuit is filed, your attorney can use powerful legal tools like depositions, interrogatories, and requests for production. They can depose the claims adjuster, their supervisor, and the insurer’s experts, forcing them to explain their decision-making under oath. They can subpoena the insurer’s internal claim files, which often contain notes or emails that reveal a conscious plan to delay or deny the claim regardless of its merits.
4. Calculating the Full Extent of Your Damages:
In a simple breach of contract claim, you are only owed the value of the underlying insurance benefit (e.g., the cost to repair your roof). A bad faith claim allows your lawyer to seek additional compensation, which may include:
- Consequential Damages: All foreseeable losses caused by the delay or denial. For example, if a health insurer denied a necessary surgery, resulting in worsened medical conditions, those additional medical costs are recoverable. If a business interruption claim was wrongfully denied, leading to bankruptcy, those losses can be calculated.
- Emotional Distress: The significant anxiety, stress, and mental anguish caused by the insurer’s unreasonable conduct.
- Attorney’s Fees and Costs: Nebraska law allows for the recovery of reasonable attorney’s fees in bad faith cases, ensuring you are made whole.
- Punitive Damages: In cases where the insurer’s conduct was especially egregious, malicious, or reckless, the court may award punitive damages. These are intended to punish the company and deter it and other insurers from engaging in similar misconduct in the future.
The Critical Advantage: Knowing When and How to Escalate
A skilled attorney knows that the goal is to achieve the best outcome for you, which may or may not involve immediate litigation. They will first often use a potent demand letter outlining the evidence of bad faith and the full scope of damages you are prepared to seek in court. This letter signals to the insurer that you are represented by serious counsel who understands bad faith law, prompting many companies to reassess their position and negotiate a fair settlement to avoid litigation.
If settlement talks fail, your lawyer is prepared to file a lawsuit that includes not only the original breach of contract (the unpaid claim) but also the separate tort of bad faith. This dual-faceted lawsuit significantly increases the insurer’s financial exposure and leverage, encouraging a more serious approach to settlement throughout the litigation process.
Choosing the Right Nebraska Attorney for Your Bad Faith Claim
Not every lawyer is equipped to handle the complexities of an insurance bad faith case. You need a firm with specific experience in this niche area of law. Look for a practitioner or firm that:
- Specializes in Insurance Law: They should have a proven track record of handling first-party bad faith claims (claims against your own insurer) for events like property damage, disability, life, and health insurance.
- Has Resources: These cases require significant investment in experts, discovery, and time. Ensure the firm has the capacity to fund the case upfront and see it through to trial if necessary.
- Understands Nebraska Law: The specifics of Nebraska’s “fairly debatable” standard and Unfair Insurance Claims Practices Act are paramount. Local experience is invaluable.
Navigating a bad faith insurance claim alone against a multibillion-dollar corporation with teams of experienced lawyers is a recipe for failure. The deck is already stacked in the insurer’s favor. A knowledgeable Nebraska bad faith insurance attorney levels the playing field, using their expertise, resources, and tenacity to hold the company accountable and fight for the full compensation you are legally owed.
