Which Insurer Actions Could Lead to a Bad Faith Insurance Claim?

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Insurer actions can lead to bad faith insurance legal claims in Texas. When you buy insurance, you are paying now for the possibility of receiving compensation later. Insurance companies have their own business interests in mind when reviewing claims, not just your best interest. If you do need to make a claim, you could find that your insurance company is acting unreasonably. Your insurer’s actions could cause you delay, harm, or expense. As a result, you may have cause for a bad faith insurance claim.

Can Insurance Companies Investigate Claims?

Yes, insurance companies have the right to investigate claims. They need to determine if a claim is legitimate before paying the claimant compensation. Insurance companies use a variety of methods to investigate claims, such as taking reports from the people affected or visiting the scene of the accident.

When you sign an insurance contract in Texas, the insurer agrees to an unwritten “covenant of good faith”. This means that the insurance company agrees to treat you fairly and honestly. Unfortunately, insurers do break this covenant of good faith. If your insurer breaks it, you can sue it for bad faith. Consult a Houston bad faith insurance claims lawyer to learn more about your rights when you sign an insurance contract.

What Is a Bad Faith Insurance Claim?

A bad faith insurance claim asserts that the insurer did not act in good faith while handling your claim. If you file a bad faith insurance lawsuit, you have the burden of proving bad faith. You need to show that the insurer committed unfair or deceptive acts under the law. It may seem daunting to go up against an insurance giant in court when you have been treated poorly by its representatives. An experienced local lawyer like those at Henke, Williams, & Boll LLP can help you prepare a convincing case against a big insurance company.

How Is Bad Faith Defined in Texas?

The Texas laws include a long list of actions constituting bad faith by insurance companies. For example, bad faith could be:

  • Knowingly misrepresenting facts or policy provisions to you
  • Not passing on important communications that could affect your claim, such as policy changes
  • Denying your claim without doing a reasonable investigation
  • Causing unreasonable delays for your claim
  • Not attempting in good faith to make a “prompt, fair, and equitable” settlement of a claim submitted when liability has become “reasonably clear”
  • Withholding information about your claim
  • Using threatening or abusive tactics towards you
  • Failing to provide a reasonable explanation for denying your claim

All kinds of insurer actions could be bad faith in practice. It can be difficult to interpret what a “reasonable” investigation is, or what an “abusive” tactic could be. Since determining bad faith can be complicated, you need an attorney to evaluate the individual circumstances of your claim. Our bad faith insurance lawyers are familiar with the Texas laws that could apply. Contact us to learn more.

First- and Third- Party Bad Faith Claims

Bad faith insurance claims can be first-party or third-party. In a first-party claim, you make the claim for damage you suffered. For example, imagine your business was burglarized and you need to replace a broken window. You would make a claim against your business insurance policy for the loss. In contrast, for a third-party claim you make a claim against your insurance for damages suffered by someone else. For example, imagine a customer slipped and fell in your store, and she’s suing you. You have to make a claim against your liability insurance. Your insurance company now must defend you in the lawsuit. If it won’t pay the damages, you can sue it (a first-party claim) and the injured customer can sue it (a third-party claim).

Damages Available for Bad Faith Claims

You could recover your actual monetary damages if you are successful in a bad faith case. Also, you could recover reasonable attorney’s fees and court costs. If you can prove that the insurer intentionally or knowingly violated the law, you could recover three times the money that your insurer should have paid if it acted in good faith. Speak to a knowledgeable lawyer to learn more.

When an Insurer Acts in Bad Faith, We Can Help

Have you made a claim against an insurance policy and had a hard time getting compensated? As experienced Houston business lawyers, we help our clients find the best solution possible to their bad faith insurance disputes. Our advice is tailored to your unique situation and circumstances. To set up a consultation, call (713) 936-5521 or use our convenient Contact Form.

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