What You Need to Know First
Insurance companies are not your friends. Their job is to maximize shareholder returns, not to help you. The tactics in this playbook are industry-standard. They're taught in training. They're incentivized in performance reviews. They happen to you thousands of times a day across America.
This page explains the legal framework you need to understand to recognize when you're being trapped. Read this. Understand it. Use it to know when something is wrong.
Core Concepts Every Citizen Should Know
Why it matters: If a party destroys evidence and you can prove it was done intentionally or with reckless disregard, a court can impose harsh sanctions — including an "adverse inference" (see below), default judgment, or hefty financial penalties.
What insurance companies do: Destroy police reports. Lose call recordings. Delete internal notes. Dispose of vehicles before EDR (black box) data can be extracted. All plausible deniability: "Oh, we lost that. Sorry."
See Nevada Revised Statutes
In other words: if an insurance company deletes the recording of your claim call, the judge can tell the jury: "Assume that recording contained an admission of bad faith."
Why it's powerful: It shifts the burden. Instead of you proving what was in the lost evidence, the jury is told to assume the worst about the defendant. This often wins cases.
NRCP 37(e) — Federal Rules of Civil Procedure (applies in federal court)
- Misrepresenting facts in the policy or claim decision
- Failing to investigate a claim reasonably
- Delaying unreasonably (e.g., stalling for years)
- Denying without basis (no reasonable grounds)
- Failing to disclose material information
- Ignoring evidence that supports the claim
See Nevada Revised Statutes
Plain English: If you paid for coverage, they have to act like it. They can't secretly deny claims for BS reasons.
Common Insurance Bad Faith Tactics You Should Recognize
1. The Delay
What it looks like: Your claim is submitted. Nothing happens for weeks. You call. "We're still investigating." You call again. "Just a few more days." Six months later, you still don't have an answer.
What's Happening
They're hoping you'll give up, accept a lowball settlement out of desperation, or miss a statute-of-limitations deadline. This is intentional. It's in their playbook.
What to do: Send a written 60-day demand letter. Cite NRS 686A.310. State that continued delay constitutes bad faith. Keep the letter. This triggers their reserves and often ends the stall.
2. The Denial Without Investigation
What it looks like: Denial letter arrives in your mailbox. No explanation. Or a vague one: "Claim denied per policy exclusion." But they didn't actually investigate whether the exclusion applied.
What's Happening
They're betting you won't fight back. They're counting on you not understanding that insurers have a legal duty to investigate *before* denying. No investigation = no valid denial.
What to do: File a records request. Ask for the investigation file. If it's empty (or contains no actual investigation), that's bad faith. Document it.
3. The Misrepresentation
What it looks like: The adjuster tells you one thing on the phone ("We cover this"), but the denial letter says something else ("Actually, this exclusion applies").
What's Happening
Misrepresenting the policy or claim status is explicit bad faith under NRS 686A.310(1)(a). One misstatement is enough to open a bad faith claim.
What to do: Request all communications in writing. Keep detailed notes of every call (record it if Nevada one-party consent applies — NRS 200.620). Misrepresentations become evidence.
4. The Rate Manipulation
What it looks like: They deny your claim, then hike your rates the next renewal cycle. Or they insure you for years, never mention the claim, then spike your rates when it comes time to renew.
What's Happening
Retaliatory rate hikes for filing claims can violate Nevada's unfair rate practices statute. If the rate increase is designed to punish you for a claim, it's bad faith and possibly illegal.
What to do: Request your rate history. Compare your rate to industry benchmarks. If the spike is unreasonable and correlates with a claim, document it as evidence of retaliation.
5. The False Data
What it looks like: The denial cites facts that are wrong. "You were speeding." (You have a dash cam showing you weren't.) "There were no witnesses." (You have three names.) "Liability is clear." (The police report shows the other driver was at fault.)
What's Happening
Denying based on false facts is bad faith. They either didn't investigate, or they did and ignored evidence. Either way, it's a violation of NRS 686A.310.
What to do: Compile the correct facts. Exhibit A: your evidence. Exhibit B: what the denial claimed. The discrepancy is proof of bad faith.
Preservation of Evidence: What You Must Do NOW
Critical: Act Immediately After an Incident
The moment an accident, injury, or claim event happens, you must preserve evidence. If you don't, the other side can (and will) destroy it. Once it's gone, it's gone forever.
What to Preserve
- Photos and video of the scene, damage, injuries, property conditions
- All written communications — texts, emails, letters, claim denials
- Medical records and bills from all providers
- Witness contact information (names, phone numbers, email)
- Police reports and any government investigation files
- Vehicle data — EDR (black box) from your car if there was a collision
- Recordings of claim calls (with the insurance company)
- Your own journal of events, dates, conversations, and symptoms
How to Preserve It
Make copies. Digital files: cloud backup (Google Drive, iCloud, etc.). Physical documents: photograph them or scan and save multiple copies. Send yourself an email with attachments as a timestamped proof of preservation.
Tell the other side you're preserving it. Send a formal letter to the insurance company stating: "We are preserving all evidence related to this claim. Please preserve all records, communications, recordings, and physical evidence." Send it certified mail. This creates a legal duty.
What You Have the Right to Know
Right to Your Own Records
You have the right to request and receive copies of:
- Your complete insurance policy and any endorsements
- The full claims file (all documents, notes, investigations)
- All communications between you and the insurer
- Any internal notes or adjuster comments about your claim
- Copies of any recordings of your claim calls
Request in writing. Email or certified letter. State a deadline (typically 30 days). If they don't comply, that's a separate violation (NRS 689B.095).
Right to an Explanation
If your claim is denied, you have the right to a detailed explanation that includes:
- The specific policy language that applies
- The facts they relied on
- Why those facts triggered the denial
- Your appeal rights and deadline
A generic denial letter ("Claim denied per policy exclusion") is not enough. Demand specificity.
Right to File a Complaint With the State
If the insurer violates bad faith law, you can file a complaint with the Nevada Division of Insurance (part of the DOI). They investigate unfair claim practices. This is separate from suing them yourself — it's a regulatory action.
Contact: https://doi.nv.gov/
When to Know You Need a Lawyer
Consider consulting an attorney if:
- Your claim was denied without adequate investigation
- You have evidence of misrepresentation by the adjuster or insurer
- There has been unreasonable delay (6+ months with no resolution)
- Your rates were hiked dramatically after filing a claim
- The denial contradicts facts you can prove with evidence
- The insurer has refused to provide records or explanations
Many attorneys handle bad faith claims on contingency (no upfront fee). The first consultation is often free. If you have a documented bad faith case, an attorney may recover attorney's fees and punitive damages — which can exceed your original claim value by multiples.
Bottom Line
Insurance companies count on you not knowing these rules. They bet you'll accept their decision without question, miss a deadline, or give up out of frustration. They have playbooks. They have training. They have incentives to deny.
Now you know the rules too. You know what spoliation is. You know what bad faith means. You know what you have the right to. You know when something is wrong.
Use this knowledge. Document everything. Preserve evidence. Send demand letters. Request records. If they step out of line, you have the law on your side.