INSURANCE/BAD FAITH CLAIMS
Bad Faith Insurance Attorney in Houston
When you make a legitimate claim against your insurance policy, you expect your insurance company to hold up their end and pay your claim. After all, you have paid premiums for years to ensure you have a safety net if the unthinkable happens. When your insurance company delays your claim, refuses to negotiate, or denies a legitimate claim, you may have a bad faith insurance claim against your insurance company.
An experienced bad faith insurance attorney Houston law firm can help you investigate your case and build a claim against your insurance company to get the fair settlement you deserve.
Table of Contents
- What is Bad Faith?
- Insurance/Bad Faith Claims Houston Examples
- First-Party Insurance/Bad Faith Claims Houston
- Life Insurance Bad Faith Claims
- Homeowner’s Insurance Claims
- Damages for a Bad Faith Claim in Texas
- Proving a Bad Faith Insurance Claim
- What to Do If Your Insurance Company Acts in Bad Faith
- Types of Insurance Claims NECH LAW FIRM Can Assist You With
What Is Bad Faith?
Insurance companies operate for a profit. This means insurance companies have an interest to keep insurance payouts as low as possible. Unfortunately, as a for-profit company, insurers have been known to deny valid claims or offer unreasonably low settlements to increase profits.
While insurance companies certainly have a right to earn a profit, policyholders pay premiums for a service. In return for premiums, the insurance company owes you a duty to help when you need to make a claim.
In Texas, an insurance company has a duty to act in good faith when you file a claim. If the insurance company does not help or acts as a hindrance, they are not holding up their end of the arrangement. This means the insurer should not attempt to escape its obligation to investigate the claim and pay you. If the insurance company does not live up to this legal expectation, it can be considered bad faith.
Insurance/Bad Faith Claims Houston Examples
There are many behaviors that can prompt a bad faith claim against an insurance company. The following are common reasons an insurer can be sued for acting in bad faith:
- Failing to complete a reasonable investigation of the claim
- Failing to communicate important information to the claimant
- Refusing to pay the claim without an investigation
- Failure to pay or deny the claim within a reasonable amount of time
- Failing to attempt to reach a reasonable settlement when liability in the case is clear
- Offering a substantially low settlement below the claim’s true value
- Failing to provide a prompt reason for denying a claim
- Failing to negotiate a settlement
- Paying only partial benefits on a claim
- Failing to defend you against a third-party insurance claim
- Requesting unnecessary documentation
- Unreasonable delay in paying benefits
First-Party Insurance/Bad Faith Claims Houston
When you make a claim against your own insurance policy, it’s called a first-party claim. Bad faith claims can cover claims with many types of insurance, including car insurance, life insurance, business insurance, disability insurance, and homeowners insurance. The following are more in-depth examples of first-party bad faith.
Life Insurance Bad Faith Claims
A life insurance policy is designed to pay a death benefit to loved ones when the policyholder passes away. Unfortunately, sometimes insurance companies do not pay death benefits as stipulated. There are many examples of insurance companies acting in bad faith:
- Retroactively canceling a loved one’s life insurance policy. Most life insurance policies have just a 2-year incontestibility clause which means the policy cannot be rescinded after two years based on material misrepresentations on the application.
- Unreasonable delays. When a beneficiary makes a claim, the insurance company must conduct an investigation. This may include requesting additional documents for proof of death, policy premium payments, or other records regarding the policy application. Still, the insurance company cannot be unreasonable in how long it takes to investigate and pay out a claim.
- Improper policy lapses. Most life insurance policies are paid with monthly premiums but sometimes the insured suffers poor health in their last few years of life and fails to pay the premium. Most policies include a 31-day grace period after the due date. If someone dies during the grace period, the beneficiary is still entitled to the death benefit.
- Misrepresentation of coverage. Sometimes insurance companies improperly interpret a policy, including the requirements and terms of coverage. Misrepresenting coverage provisions can result in a bad faith claim.
- Improper reliance on exclusions. There are always exclusions from coverage. These exclusions can be ambiguous and vague to encompass as many scenarios as possible. Despite this, insurance companies cannot rely on these exclusions in an unreasonable manner.
Homeowner’s Insurance Claims
Homeowner’s insurance claims over $50,000 are among the most likely insurance claims to involve bad faith. Improper claim denial and delays are especially common in the case of fire, hail damage, and total home destruction. The insurance company owes you a duty to complete a thorough but prompt investigation of your claim. Unless there is a valid reason to deny your claim, the full value of your claim should be paid.
Damages for a Bad Faith Claim in Texas
If you are successful in your bath faith claim against an insurance company, you can receive at the minimum the full value of your claim that the insurance company should have paid plus your attorney fees, court costs, and interest. You can also be awarded up to three times the amount the insurer should have paid if your claim was processed properly if you can show the bad faith was knowing or intentional.
Proving a Bad Faith Insurance Claim
To prove bad faith, you will need to show that the insurance company breached its duty of good faith by refusing to compensate for a covered loss without proper cause. Texas also has a “reasonable person” requirement in these cases which means insurance contracts must only use terms that someone of reasonable intelligence could understand. If a policy has vague or complicated wording, some sections of the policy may not be valid.
An experienced bad faith insurance lawyer Houston law firm can help you investigate your case to determine if your insurance company acted in bad faith.
What to Do If Your Insurance Company Acts in Bad Faith
Get all correspondence with the insurance company in writing whenever possible, whether it’s regular mail, fax, or email. This advice applies to the claim, all contact with the insurance company, the name of anyone you speak with, and the time of contact. This information can be used as evidence to build your claim if you decide to file a bad faith claim against the insurance company.
Sometimes it can be difficult to tell if an insurer is acting in good faith when handling your claim. If you suspect this is the case, however, it’s important to contact an experienced bad faith insurance attorney Houston law firm as soon as possible. You can also file a written complaint with the Texas Department of Insurance.
A bad faith insurance lawyer Houston firm can help you investigate your claim and build a case showing that your insurance company is not meeting its legal duty. If you believe you have a bad faith insurance claim, contact our firm today to schedule a free consultation.
Quickly and easily resolving a claim on your won made against your own insurance company is rarely possible. Your insurance company has tactics in place to make the process of making a claim and receiving a fair settlement difficult and even impossible without the help of an attorney.
You pay high premiums for coverage for your property, and the Nech Law Firm is committed to helping you hold your insurance company to its obligations.
Types of Insurance Claims We Can Assist You With:
The Nech Law Firm has experience and understanding in many types of “first party” insurance claims – claims you are making against your own insurance policy. We have years of experience in effectively representing clients resolving claims in all of the following areas:
- Property damages
- Hurricane/natural disaster damages
- Plumbing damages
- PIP (personal injury protection) Coverage
- Med Pay Coverage
- Uninsured/Underinsured Motorist Coverage
To begin your fight against dishonest insurance company tactics, contact us by calling or texting 713-936-9496 for a free consultation. You can also fill out the below form and we’ll contact you as soon as possible.