In Texas, insurance companies have a responsibility to their policyholders to ensure that claims are settled promptly and resolved in a timely manner. This means that if a company breaches its duties and leaves you responsible for additional damages, penalties and attorney’s fees, you have every right to sue the insurer for a policy violation.
You should be aware that Chapter 541 of the Texas Insurance Code states in detail that if insurers engage in an unfair method of competition, or unfair or deceptive practices, they must pay and settle these claims.
If you believe your insurance company acted in bad faith, contact a Texas insurance attorney as soon as possible.
What is bad faith insurance in Texas?
Bad faith insurance claims arise when you feel that your insurance company has treated you inappropriately. Insurers have a duty to treat an insured party fairly and in good faith throughout the claims process.
That said, an insured party may pursue a bad faith claim if they can demonstrate that there was no response from the insurer. On the other hand, if after a reasonable investigation, the insurer has evidence that proves the insured party’s claim is invalid, a bad faith claim won’t be viable.
Evidence for a bad faith claim in Texas
When pursuing a bad faith claim in Texas, it’s important to understand that you have the burden of proof. With the help of your attorney, you must demonstrate how the facts of your case meet the requirements of a bad faith insurance claim.
There are two ways you can prove your claim:
- As a common law bad faith claim, or
- As a statutory bad faith claim.
First-party and third-party claims of bad faith
A bad faith lawsuit can be based on either a first-party or third-party claim. To learn about the differences between them, we’ll explain each below. Either way, you can get assistance from a Texas bad faith insurance claim lawyer.
- First-party claims
A first-party claim occurs when you file a lawsuit against your own insurance company after an accident or injury.
For example, if your vehicle’s roof is damaged by hail, you should file a first-party claim with your homeowner’s insurance company. In the event that your insurance company breaches its duty of good faith by denying your claim without conducting an investigation, you should file a first-party bad faith claim.
- Third-party claims
A third party claim is one that involves liability insurance. In short, you purchase this policy to protect yourself from claims made by others.
This type of bad faith claim can occur when your insurance company fails to defend, indemnify or settle a claim against you (hence third party). For example, if you crash into another vehicle and the driver files a lawsuit, you should immediately report the accident to your insurance company, who now has a duty to defend you in the lawsuit and pay damages according to your liability policy.
If your insurance company refuses to defend you or is unwilling to settle with the other driver, you may file a third-party bad faith claim. In addition, the victim has the right to file a lawsuit against your insurance company for refusing to pay damages.
Damages in a bad faith claim in Texas
In Texas, the principle behind bad faith statutes derives from the notion that an insured individual is at a significant disadvantage in the claims process and during any lawsuit against the insurance company.
To bring a bad faith claim against an insurance company, the plaintiff needs to show that the company’s conduct was unreasonable. In the words of a Texas Supreme Court decision on the matter, the conduct must be “egregious.”
Bad faith claims can be filed for almost any type of insurance such as auto, property, health and life. Here are some examples of bad faith claims:
- Unreasonable delays without explanation
- Failure to acknowledge receipt of a claim
- Failure to conduct a prompt and thorough investigation of a claim
- Failure to provide a claims settlement in a timely manner when liability is relatively clear
- Attempting to settle a claim for less than what a reasonable person would believe to be fair
- Failing to notify an insured party of policy modifications that would affect a claim
- Making payments without explaining what those payments mean
- Failing to explain an arbitration appeals policy
- Requiring physicians or insured parties to submit multiple forms containing the same information and using failure to submit as a reason for denial
- Requesting unnecessary documentation
- Failing to explain why a claim was denied
- Concealing information about a claim
- Making unfair accusations of arson or other misconduct on the part of the insured
- Resorting to abusive tactics to discourage claims
What should you do if you believe your insurance company has acted in bad faith?
Do any of the above situations sound familiar? Contact a Texas bad faith insurance lawyer if you suspect your insurer is acting improperly.
Document and save all conversations with your insurance company so you can share them with an attorney at George Salinas Injury Lawyers. In this way, your lawyer can start putting together an investigative file and begin the claims process.
Getting legal assistance may seem expensive, but at the Law Offices of George Salinas, we work on a contingency fee basis. This means if we don’t win your case, you don’t pay us.
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