When insurance companies adjust a customer’s insurance claim in Texas, they owe the insured the common law and statutory duty of good faith and fair dealing, along with an obligation to pay claims promptly, as codified in Chapter 541 and Chapter 542 of the Texas Insurance Code. This means insurers are required by law to treat you a certain way. The insurer, since it inherently has an advantage over you, must treat you fairly. If they violate this legal responsibility, then they are said to have acted in bad faith. When an insurer acts in bad faith, policyholders can file a lawsuit for almost any type of insurance, whether property insurance, life insurance, or another type of insurance.
If you are successful in your Texas bad faith insurance lawsuit, your damages can include:
- Up to three times the amount the insurance company would have paid if it had processed your claim properly, if you can prove an intentional or knowing violation
- Attorneys’ fees, interest, and court costs
- Statutory penalties in the form of interest for delayed payments
- Punitive damages to punish the insurance company for its bad behavior
Insurance Companies Act In Bad Faith When They:
- Advise their insured not to hire an attorney
- Alter or cancel your insurance policy after you file a claim
- Attempt to settle a claim for less than what a reasonable person would find fair
- Delay payment after resolving your claim
- Delay the investigation of your claim without justification
- Delay the processing of your claim without justification
- Deny your claim without conducting an investigation
- Deny your claim without providing a reasonable explanation in writing
- Unreasonably delay the payment of a valid claim without explanation
- Fail to acknowledge receipt of a claim
- Fail to conduct a prompt and thorough investigation of a claim
- Fail to explain why a claim was denied
- Fail to maintain reasonable communication with you
- Fail to notify the insured of policy alterations that would affect a claim
- Fail to offer a claim settlement in a timely manner when liability is relatively clear
- Intentionally misrepresent claims information and/or policy language
- Make payments without explaining what they mean
- Make an unreasonably low settlement offer and refuse to negotiate
- Misinterpret Texas law to avoid liability
- Misrepresent the value of a claim
- Request unnecessary documentation
- Require the insured to submit multiple forms containing the same information, using failure to submit as a reason for denial
- Transfer your claim among numerous claims adjusters to delay payment
- Withhold information about a claim
- Wrongly accuse the insured of fraud, arson, or other misbehavior without a reasonable justification for doing so.
Texas Insurance Lawyers
You and your attorney must show the facts surrounding your insurance claim prove the insurer is acting in bad faith. It can be very complicated to establish an insurance company acted in bad faith. That is why it is very important to consult with a Texas attorney experienced in bad faith insurance cases. Raizner Law has successfully handled insurance law claims for Houstonians, Texans, and property owners around the country. Contact us today to see how we can help.
