Our bad faith insurance lawyers help individuals and businesses who are fighting the insurance company for fair payment.
Is an insurance company refusing to pay you what you deserve? Are you getting the run around? Our lawyers for bad faith insurance claims can help.
What is insurance bad faith?
Insurance bad faith occurs when the insurance company doesn’t resolve a claim promptly and fairly. It may also occur when the insurance company misrepresents a policy or otherwise acts dishonestly.
Types of Bad Faith Insurance Claims
Texas allows bad faith claims for most types of insurance. A claim may be based on the following types of insurance:
- Property (Homeowner’s Insurance, Commercial Property Insurance)
- Other insurance
What is a bad faith insurance claim?
A bad faith claim is a legal action brought against an insurance company for refusing to pay a claim promptly or fairly. A bad faith claim usually seeks payment of an outstanding claim that was either denied, delayed or underpaid. Under Texas law, an insurance company four liable for bad faith may owe extra damages, particularly if the conduct was done “knowingly” or “intentionally” in violation of Texas law.
Examples of bad faith
How do you know if the insurance company is acting in bad faith? Here are some examples:
- Refusing to investigate a claim
- Delaying payment for no reason
- Accusing you of arson or other malfeasance without any basis for it
- Not acknowledging that you filed a claim
- Stalling the investigation
- Declining to make an offer when fault is clear
- Not honestly trying to make a settlement
- Failing to affirm or deny coverage within a reasonable time
- Offering too little
- Making material changes to a policy without disclosing it
- Not explaining what a payment is for
- Denying a claim without a reason; misrepresentations and misleading statements
- Requiring multiple forms asking for the same thing
- Exhausting the claimant with too much, unnecessary documentation
- Threats or abuse to discourage claims
As you can see, there are a lot of ways that an insurance company can act in bad faith. What all these examples have in common is that the insurance company doesn’t do its part to pay your claim promptly and fairly. The insurance company can’t just collect premiums and then not pay claims. When they unfairly delay investigations, deny payments and mislead customers, bad faith insurance laws help victims access compensation and hold the insurance companies accountable.
Understanding bad faith
When you take out an insurance policy, you hope to never need to make a claim. But, if something happens, you expect the insurance company to resolve the claim fairly. You expect them to investigate within a reasonable time period and offer the settlement that you deserve based on your policy.
What happens if they don’t?
The insurance company must act reasonably. They must investigate and pay a claim within a reasonable time. If the insurance policy covers the loss, they must pay it.
If the insurance company doesn’t keep up their end of the bargain, they may meet the legal standard for bad faith. If the insurance company acts in bad faith, you may have a claim against them. The claim is in addition to what they should have paid you under the policy.
When Can You Sue for Insurance Bad Faith?
You can sue for insurance bad faith when you have fully and completely made an insurance claim, and the insurance company responds in bad faith. First, you must submit a claim, providing all items, statements, and forms that are required by law. Then, if the insurer doesn’t pay the claim in a timely manner, you may bring your lawsuit.
The claimant – that’s you – has a duty before the lawsuit can begin. You must submit everything necessary for the insurance company to investigate and process the claim. That doesn’t mean the insurance company can just ask for more and more information and never pay. In most cases, they must accept or reject a claim within 15 business days after having the information they need.
A claim can begin after bad faith has occurred. There are time limits, too. You have two years from the date of the bad faith to file your claim.
Compensation for a Bad Faith Insurance Claim
Compensation that you receive for a bad faith insurance claim may include:
- Payment you are entitled to
- Damages that result from the insurance company’s behavior
- Up to three times damages when the insurance company “knowingly” acts in bad faith
- Attorney’s fees
- Court costs
- Mental anguish (personal cases only, not business cases)
The damages available in bad faith insurance claims serve two purposes – first, they compensate the victim for what they should have received in the first place. Attorney’s fees and court costs are available. Mental anguish represents the stress that the individual goes through when the insurance company doesn’t fairly pay a claim. The victim is made whole, both financially and emotionally, for what they have been through.
Other damages are meant to discourage the insurance company from acting in bad faith. Extra damages and punitive damages serve as an incentive to the insurance company to change their behavior and fairly honor their policies.
How can an insurance company act in bad faith?
There are multiple scenarios where an insurance company can act in bad faith. One scenario is where you want them to pay you for compensation they owe you. For example, your home suffers damage during a storm. Your homeowner’s insurance policy covers it, but the insurance company refuses to pay. This is a scenario where you may bring a bad faith insurance claim for their refusal to pay you.
Texas Bad Faith Insurance Laws
Texas bad faith insurance laws come from two sources:
Texas common law – You must prove that the insurance company denied the claim even though liability was reasonably clear.
Texas law – Title 5, Subtitle C, Chapter 541 – Unfair Methods of Competition and Unfair or Deceptive Acts or Practices and Chapter 542 – Unfair Claim Settlement Practices Act –The laws require the insurance company to act honestly and promptly in their business practices. You must prove that the insurance company broke one of these laws.
Lots of terms used in bad faith insurance claims are subject to interpretation – honestly, reasonable, fair, prompt. What these words mean is often a matter of opinion. As bad faith insurance lawyers, our team works to determine if what happened in your case meets the standard for bad faith. If it does, we carefully build the evidence to prove your case and clearly explain what happened.
What is the statute of limitations for a bad faith insurance claim in Texas?
The statute of limitations to bring a bad faith insurance claim in Texas is two years from the date of denial or underpayment. However, some policies may attempt to place restrictions that need to be reviewed individually on a case by case basis.
How do you bring a bad faith insurance claim?
To bring a bad faith insurance claim, you file a legal action. The claim alleges that the insurance company violated their duty to fairly honor the policy, or engaged in some other deceptive act.
You must prove your right to compensation under the insurance policy. You must explain the actions of the insurance company and why their actions were not reasonable. It’s also important to identify and prove the amount of damages that you deserve.
What should you do if you think your insurance company is acting in bad faith?
If you think that your insurance company is acting in bad faith:
Keep careful records of everything – Proving what the insurance company did in the process of your claim may be very important later.
Keep records of dates – Many claims are based on unreasonable delays. Keep a diary of when things happen so that you can point to these delays as bad faith.
Understand the types of bad faith – Learn what you can about insurance bad faith and examples to compare them to your case.
Involve an attorney early – A lawyer can ensure that you’ve done the right things to assert your right to compensation under a policy. In addition, they know how to respond to the insurance company if they are delaying or denying payment.
Don’t delay – There are deadlines that apply to bad faith insurance claims. Don’t miss out on receiving the compensation that you deserve because the clock runs out. Talk to a bad faith insurance lawyer as soon as possible to begin your claim.
Where Do You File for Insurance Bad Faith?
Did you know that there are 2,800 courts in the State of Texas? Most claims are brought in the county where the defendant has their principal office or where the events occurred that give rise to the claim. It may be possible to move the case to a more convenient venue. See Tex. Civ. Prac. & Rem. Code § 15.002. There may be reasons you can – or should – file the case in a federal court instead of a state court. That decision shouldn’t be made lightly because there are different procedures that may significantly impact the case.
As part of our legal representation, we determine the appropriate place to file the claim.
Can third parties sue for insurance bad faith?
Third party insurance bad faith claims in Texas are limited. If the insurance company won’t pay, you must sue the responsible party directly. The insurance company won’t be mentioned during the trial, but they’re the ones that must pay the judgment. The insurance company will likely be involved in defending or managing the case.
In Texas, there is something called a Stowers claim where the third party’s damages exceed insurance policy maximums. It may be possible to bring a claim if a Stowers demand is not met. See G. A. Stowers Furniture Co. v. American Indemnity Co., 15 S.W.2d 544 (Tex. Civ. App. 1929).
How Do You Win a Bad Faith Lawsuit?
To win a bad faith lawsuit, you must prove:
- The existence of an insurance contract
- An insurance claim
- The insurance company’s refusal to pay
- Bad faith in the insurance company’s refusal to pay
- Appropriate compensation as allowed under Texas law
Winning a bad faith lawsuit requires a detailed showing of how the bad faith occurred. It may be showing that the insurer knowingly avoided paying a legitimate claim. You may show that they failed to properly investigate and respond to the claim. The actions of the insurance company and the timeline are important to proving a claim.
Bad Faith Insurance Lawyers Near Houston
If you are concerned about an insurance company’s handling of a case, we invite you to talk to our bad faith insurance lawyers near Houston to talk about your case. Texas law protects you – but you must assert your rights. Our lawyers accept cases in Houston and throughout Texas.
Our lawyers for bad faith claims know how frustrating it can be when the insurance company doesn’t fairly pay. It can add a lot of worry and stress to an already stressful situation. Our lawyers know how to help you fight back.
Attorney Ryan Haun has also handled thousands of cases in multiple states for bad faith claims surrounding hurricanes, windstorms, hailstorms, wildfires, plumbing leaks, explosions and house fires. On the commercial side, he has also represented multiple clients for property damage, business interruption/lost rent, and subrogation. Allow us to put all of our experiencer to use in helping you with your case.
Free Consultation – Taking New Cases
The last thing you should have to worry about when an insurance company acts in bad faith is how to pay for a lawyer. That’s why at Haun Mena, we represent you with no risk to you. You pay us only when we succeed in getting a settlement or judgment in your favor.
When you work with the Haun Mena bad faith insurance lawyers, you get partner-level representation throughout your case. We’ll never pass your case off to an inexperienced associate. Plus, you communicate directly – with your lawyers – throughout your case. You never pay for our time – only for our results.
Contact us for your free consultation. Learn more about our representation and how we can help you achieve justice.
Whether your case is large or small, we’re here to help. Contact us today.