OverCompare US → Bad-faith by state → Nebraska

Insurance bad faith · Nebraska

When a Nebraska insurer refuses a claim it should have paid

Nebraska does recognise a first-party bad-faith tort, so you can sue your own insurer for the way it handled the claim, not just for the money. What Nebraska will never give you is punishment: the state constitution sends every fine and penalty to the school fund, and the Supreme Court reads that as a flat ban on punitive damages. There is also no private lawsuit under the unfair claims statute — that one belongs to the regulator. So the realistic ceiling is your benefits, your consequential losses, mental distress, 12% interest and, if you win on the policy, your legal fees.

Last reviewed August 2026 · A real bad-faith tort, but the constitution bans punitive damages

At a glance

Legal framework

Tort. The first-party bad-faith action was recognised in Braesch v. Union Insurance Co., 237 Neb. 44, 464 N.W.2d 769 (18 January 1991), which adopted the Wisconsin Anderson test. Running alongside it, but for the regulator only, is the Unfair Insurance Claims Settlement Practices Act, Neb. Rev. Stat. §§ 44-1536 to 44-1544, and the claim-handling rule at 210 Neb. Admin. Code ch. 60.

Can you sue directly?

Yes for the tort, no for the statute. Braesch gives the insured a direct tort claim: you must prove (1) the absence of a reasonable basis for denying benefits of the policy and (2) the insurer’s knowledge or reckless disregard of the lack of a reasonable basis for denying the claim. Only the policyholder, a covered person or a beneficiary can bring it — a third-party claimant suing someone else’s insurer cannot. The Unfair Insurance Claims Settlement Practices Act creates no private remedy: under § 44-1539 the conduct only counts if it was flagrant or done often enough to be a general business practice, and the sanction under § 44-1543 is a cease and desist order plus up to $30,000 per violation, capped at $150,000, paid to the state and not to you.

Deadline

5 years to sue on the policy itself — it is an agreement in writing under Neb. Rev. Stat. § 25-205(1). 4 years for the bad-faith tort, as an injury to the rights of the plaintiff not arising on contract under § 25-207(3). Work to the 4-year date from the denial. Then read your own policy: a suit-limitation clause in the contract can be far shorter than either figure, and on property policies it is often twelve months.

Before you file

None required. Nebraska imposes no notice letter, no cure period, no certificate of merit and no mediation before you file, on either the contract claim or the bad-faith tort. Complaining to the Department of Insurance is optional and is not a step you must take first. You do still have to satisfy the policy’s own conditions — proof of loss, cooperation, examination under oath, any appraisal clause. One thing worth doing voluntarily: serve a written settlement offer by certified mail, because under § 45-103.02 that is what starts prejudgment interest running on an unliquidated claim.

What you can recover

Damages available in Nebraska

The unpaid policy benefits and the consequential losses that flowed from the refusal
Damages for mental distress. Braesch put bad faith alongside other intentional torts and allowed recovery for emotional harm — this is the main thing the tort adds over a plain breach-of-contract suit
No punitive damages. None, in any case, ever. Braesch itself says flatly that punitive damages are not allowed in Nebraska. Distinctive Printing & Packaging Co. v. Cox, 232 Neb. 846 (1989) holds that punitive, vindictive or exemplary damages contravene Neb. Const. art. VII, § 5. No amount of proof, no degree of outrage, changes this
Attorney fees under Neb. Rev. Stat. § 44-359 — the court shall allow a reasonable fee on top of your recovery. Two catches: the fee follows a judgment on the policy, not the tort claim, and you get nothing if you fail to beat what the insurer formally offered under § 25-901
Interest at 12% a year on money withheld by unreasonable delay of payment or due on a written instrument (§ 45-104), and prejudgment interest under § 45-103.02 if you served a written settlement offer by certified mail at least ten days before trial and then beat it

Attorney listings

Insurance dispute attorneys — Nebraska

Three listing slots on this page are available to attorneys licensed in Nebraska who handle disputes against insurers. Listings are paid advertising sold at a flat monthly rate. They are shown in the order they were purchased. We do not rank, score, endorse or recommend any attorney, and we have not assessed the quality of anyone’s work.

Listing 1 of 3

Unclaimed

Reserved for an attorney licensed in Nebraska who handles insurance disputes

Listing 2 of 3

Unclaimed

Reserved for an attorney licensed in Nebraska who handles insurance disputes

Listing 3 of 3

Unclaimed

Reserved for an attorney licensed in Nebraska who handles insurance disputes

For attorneys

Claim a listing

Flat monthly rate. Not ranked, not endorsed.
Enquire →

How to find one yourself, free

Nebraska State Bar Association Find-a-Lawyer — 402-475-7091

The NSBA runs a searchable Find-a-Lawyer service rather than a traditional matching referral line. Participating lawyers are licensed in Nebraska, carry malpractice cover and agree to charge $50 or less for the first 30 minutes. The bar’s toll-free number is 800-927-0117. Nebraska runs no certified-specialist programme, and the state bar says in terms that it does not certify specialists. There is no official list of insurance or bad-faith specialists to check, so judge a lawyer on their actual case history instead.

Before you sue

How often does your insurer actually pay?

Worth checking before you spend money on a lawyer. Two different measures exist, and they are not interchangeable — one is a real payment record, the other is a complaint count.

Health cover — real denial rates

Published, per insurer

Health insurers selling on the federal marketplace must report how many claims they received and how many they refused. The figures are public and free to inspect.

20%

Average denied, 2023

1%–54%

Range across 175 insurers

The spread is the point. Two insurers selling comparable cover in the same state can refuse wildly different shares of what they are billed for. Look your own up before you assume your refusal was routine.

Search the CMS Transparency in Coverage files — by insurer and by state

Source: CMS Transparency in Coverage public use files, plan year 2023 experience. Self-reported by insurers and not audited. Covers federal-marketplace plans only — not employer cover, and not state-run marketplaces. Post-service claims only.

Home, auto & property

No payout rate is published

There is no free public figure showing what share of home or auto claims any named insurer pays. Insurers do report it to regulators, but in most states that filing is confidential. Any table you see online quoting payout percentages for property insurers is either a paid commercial product or an estimate.

What is public is the complaint index — how many confirmed complaints a company generates against its share of the market. 1.00 is average. 3.00 means three times the complaints its size would predict.

NAIC company complaint lookup — every state, search by company
Nebraska Department of Insurance — Nebraska’s own complaint route

Complaint indexes are published by state insurance departments and compiled by the NAIC. Figures move with both the company’s complaints and the wider market’s.

These two numbers are not the same thing. A denial rate is the share of claims an insurer refused. A complaint index is how often customers complained relative to the company’s size. A low complaint index does not mean an insurer pays well, and a high one does not prove it refuses claims — it can reflect the kind of cover it sells or the customers it attracts. Neither figure says anything about whether your claim should have been paid.

The clock

What the insurer is required to do, and by when

Nebraska runs on fifteen days. Under 210 Neb. Admin. Code ch. 60 the insurer must acknowledge your claim within 15 days unless it simply pays, reply to any other pertinent communication within 15 days, supply claim forms and assistance within 15 days, and begin investigating within 15 days. Within 15 days of getting your proof of loss or settlement information it must accept or deny, and make a fair offer if it accepts. If it needs longer it must say so and then write to you with the reason every 30 days until it decides. Payment is due within 15 days of your acceptance. Neb. Rev. Stat. § 44-1540 backs this up, requiring claim forms within 15 working days of a request and prompt acknowledgment of communications.

The thing most people miss

Nebraska is the one state where punitive damages are unconstitutional across the board. Neb. Const. art. VII, § 5 directs all fines, penalties and licence money to the common schools. The Supreme Court has read that as meaning a private plaintiff cannot pocket a penalty, so Nebraska awards none — not in bad-faith cases, not anywhere. The practical effect is that an insurer here can calculate its worst case almost exactly: the claim, your provable losses, distress, interest and fees. There is no number in a Nebraska case that an insurer cannot see coming, which is why the leverage a policyholder feels in Oklahoma or Montana simply is not there.

Unsettled: Two things are genuinely soft. First, the limitation period for the bad-faith tort: the 4-year catch-all in § 25-207(3) is what practitioners and courts use, but the Nebraska Supreme Court has not squarely fixed it in a holding, so treat the shorter date as the real one. Second, the biggest practical obstacle is not a deadline at all. Under Radecki v. Mutual of Omaha (1998), if a lawful basis for denial actually existed the insurer cannot be liable in bad faith as a matter of law, and whether your claim was “fairly debatable” is decided by the judge, not the jury, on what the insurer knew at the time. A great many Nebraska bad-faith claims die there before anyone sees a courtroom. Separately, the annotations to § 44-359 indicate fees are not available for tort or excess-judgment suits against an insurer, so plead and win the contract claim if you want your legal costs paid.

Free first step

Complain to the regulator before you spend anything

A complaint to the Nebraska Department of Insurance costs nothing, creates a written record, and sometimes moves a stalled claim on its own. It is not a substitute for legal advice and it does not pause any deadline — but there is rarely a reason not to do it first.

Nebraska Department of Insurance — file a complaint
Consumer helpline: 877-564-7323 (in Nebraska) or 402-471-0888

Where this comes from

Sources

Other states

Compare Nebraska with

COColorado MAMassachusetts NMNew Mexico NCNorth Carolina TXTexas WAWashington AZArizona CACalifornia

See all states and the scoreboard →

This page is information, not legal advice. Insurance law differs by state and changes often. Nothing here creates a lawyer–client relationship, and no page can tell you whether your own claim is worth pursuing. If a deadline may be close, speak to a lawyer licensed in your state now rather than later — several of the deadlines described here start running on the date of the loss, not the date your claim was refused.

Attorney advertising. OverCompare is not a law firm and does not provide legal services. We do not recommend, endorse, rank or vouch for any attorney or law firm. Advertisements are paid placements, are marked as advertisements, and have no effect on our editorial rankings of insurers or of state law.

OverCompare is operated by Delixia Ltd, registered in England. Registered address: 14 Maltings Field, Castlethorpe, MK19 7EG.