10 Steps to Prove a Bad Faith Insurance Claim

1. Understanding Bad Faith Insurance Under Texas Law

Start by understanding what bad faith is under Texas Law. To prove bad faith, you need to know what it is.

To win a bad faith insurance claim in Texas, you must prove:

There is an insurance policy.
A policyholder has a valid claim.
The policyholder made their claim.
The insurance company delayed or denied the claim.
There was bad faith by the insurance company.

Most bad faith claims in Texas fall under statutory law, or Texas Insurance Code Chapter 541 – Unfair Methods of Competition and Unfair or Deceptive Acts and Practices. A claim may also be based on common law, which is broadly defined as an unreasonable denial or delay of an insurance claim.

2. Common Signs of Bad Faith Practices by Insurance Companies

To prove your case, you must explain exactly what the insurance company did or failed to do, that amounted to bad faith. Consider the common signs of bad faith practices by insurance companies, including:

Refusing to pay, when it’s an obvious claim
Saying the case is worth much less than it is
Ghosting you – failing to communicate
Stalling, or constantly asking for more information or things that aren’t necessary
Not explaining why they’re denying a claim or underpaying

Carefully review your policy and the actions of the insurance company. Remember that insurance bad faith can be an affirmative action or failure to act. It might be a low offer, or it might be failing to respond for too long.

3. Documenting the Evidence: What You Need to Build Your Case

A legal claim requires evidence. You must build your case to show that bad faith occurred. Take photos and video of the damage. Make sure the images you capture are detailed, including inside closed doors and cabinets, as appropriate. Make sure there is adequate lighting.

You should gather estimates and appraisals to verify the extent of the loss. You may need witness statements and other investigative measures. Building a clear picture that there was a valid insurance claim and no reason not to pay it can help you prove the insurance company acted in bad faith.

4. Retain the Evidence

Don’t discard any evidence or information. Be sure to keep copies of images and documentation. If you receive paper documents, scan them so you have electronic copies. Even if you think it won’t be important in your legal claim, save it for now.

5. The Role of Communication in Proving Bad Faith

A bad faith claim can be based on failure to communicate. Keep track of all communications with the insurance company. Record the date, who you spoke to, their role in the company, and the substance of the communication. Keep letters and emails.

Your communication is important, too. Submit all the needed documentation promptly. Remember that Texas law has a notice requirement before filing a bad faith claim.

6. Is Your Claim Being Handled Fairly?

As you build your legal strategy, think about the case from the insurance company’s perspective. What reasons could they give for denying your claim? Have they given any reasons for denying your claim? Work backward and do anything you can to cut off these excuses.

Make sure that you have fully and correctly submitted your claim. Make sure that supporting evidence, appraisals, and estimates are clear. Don’t give the insurance company any grounds to cry foul that you didn’t take care of everything needed for your claim.

7. Send a Demand Letter

A demand letter is a formal document that clearly states the case and the relief requested. A demand letter is part of communication because it states what you expect to happen in terms of payment. Plus, it lets the insurance company know that you’re taking your case seriously.

8. File Your Case in Court

Proving your case means following the right legal steps. You must file your case in court. The filing documents summarize the facts, state the legal cause of action as bad faith, and demand compensation. Your filing documents must be precise. You may continue to discuss the case with the insurance company, and you may take your case to trial.

9. Identify Your Damages

Part of proving a case for insurance bad faith is identifying the losses that you have. You can claim damages, court costs, attorney fees, and extra damages if the violation is known. Proving your damages can help you ensure that you are compensated fairly for bad faith.

10. Involve a Lawyer Early

You don’t have to wait for a formal court case to be filed to involve a lawyer in a bad faith claim. In fact, the sooner you have a lawyer, the better. They can strategize to show that the company is acting in bad faith. They can document the actions of the insurance company and work to hold them accountable for bad faith practices.

How to Prove Lowball Settlement Offers Are Made in Bad Faith

A lowball settlement may be made in bad faith if:

It’s lower than appraisals and estimates
The insurance company can’t tell you how they arrived at the amount
Nobody is calling you back
An offer comes in too fast
The adjuster is downplaying your loss
They’re saying things about your insurance policy that aren’t true
Long delays are occurring, without explanation
You’re getting blamed unfairly
They say it’s a final, non-negotiable offer
Pressure to accept, creating urgency

Our attorneys can evaluate your offer to see if it is a lowball. We’ll advise you of the next steps.

Contact an Experienced Houston Bad Faith Insurance Lawyer

At Haun Mena, we hold insurance companies accountable. We know how to prove bad faith in court. We handle claims throughout Texas. Call or message us now to talk to an attorney about your case.