Insurance Bad Faith Victory: Nevada Court Affirms $160M Award, Michigan Supreme Court Reviews Garnishment Rights

Insurance bad faith enforcement achieved major victories in 2025-2025, with Nevada Supreme Court affirming $160 million bad faith award in Sierra Health & Life Insurance case - one of the largest bad faith awards in recent history.

Michigan Supreme Court will decide in 2025 whether judgment creditors can use garnishment writs to pursue insurers for bad faith refusal to settle, potentially expanding policyholder protection when insurers unreasonably reject settlements.

California Supreme Court strengthened consumer protection by ruling homeowner Unfair Competition Law claims aren't barred by contractual limitations when seeking broad public interest relief rather than policy recovery.

Auto insurance bad faith remains widespread: insurers routinely delay approving medical treatment coverage for accident victims, forcing injured people to choose between immediate care and financial burden while battling for coverage.

Property insurance challenges expanded as Fifth Circuit affirmed dismissal of homeowners' bad faith complaint containing only conclusory allegations, requiring specific facts about insurer conduct to survive motion to dismiss.

Nevada maintains strongest consumer protection through NRS 686A.310 requiring insurers to protect policyholders and pay damages directly to consumers, while mandating departments of insurance enforce overcapitalization requirements.

Medical malpractice insurers face increased scrutiny: professional liability insurers defending claims under reservation of rights with less than 10% victory chance, ultimately settling with both insurer and doctor funding, showing bad faith exposure.

Bad faith proof requires demonstrating benefits were wrongfully withheld and insurer conduct was unreasonable under totality of circumstances, with Ninth Circuit recognizing breach of duty to settle as bad faith grounds.