Any insurance claim is important to the person who is filing it. You’ve carefully prepared and submitted the information the insurance company needs to process the claim. You send the information and wait.
However, you may be disappointed in the insurance company’s response. It may seem like they didn’t even try to investigate the claim. You may be left feeling frustrated and wondering what to do next.
What if the insurance company didn’t investigate your claim? Is there anything that you can do?
At Haun Mena, our Houston insurance lawyers are willing to examine your case and determine if the insurance company didn’t do its due diligence to investigate your claim. Contact us to begin.
What to Do If the Insurance Company Doesn’t Investigate Your Claim
If the insurance company doesn’t investigate your claim, you may take legal action.
The insurance company has a duty to thoroughly investigate a claim. They must investigate in a way that is reasonable in time, depth and resources. If they fail in their duty, they may be obligated to pay damages, penalties, and attorney fees. You may also bring a claim to enforce payment of the original contract.
If the insurance company doesn’t reasonably investigate:
- They may be in violation of the law and their obligations
- They may owe you damages, penalties, and attorney fees
- You must bring legal action to enforce your rights
- An attorney may represent you
- The legal action is in addition to enforcing the terms of the contract
If the insurance company doesn’t investigate your claim fairly, our attorneys can help. Our team can investigate your situation. We can directly contact the insurance company to negotiate on your behalf. In addition, if necessary, we can take legal action, representing you.
We are an experienced team who helps people enforce their right to be treated fairly and receive the payments they deserve. If you have questions about the treatment you have received or how the insurance company has responded, we invite you to contact us. We will explore every possibility for you to receive fair payment.
The insurance company’s duty to investigate
The insurance company has an unequal position of power compared to the insured party. When there is a claim, the insured party must ask the insurance company to pay it and hope they do. They are a large corporation, and the insured is often an individual acting on their own.
For this reason, the insurance company has a legal duty to be fair and honest. They must honor the policy contract that they have entered. This is called the duty of good faith. An important part of their obligation is the duty to thoroughly investigate a claim.
Texas Statute § 541.060(7) details an insurance company’s obligation to refrain from unfair settlement practices. The insurance company may not refuse “to pay a claim without conducting a reasonable investigation with respect to the claim.”
In Viles v. Security Nat. Ins. Co., the court said:
The “special relationship” between the insured and insurer imposes on the insurer a duty to investigate claims thoroughly and in good faith and to deny those claims only after an investigation reveals a reasonable basis to do so.
788 S.W.2d 566 (1990).
The insurance company must not only investigate their claim, but they must be thorough. Then, they may refuse a claim only if they have a reasonable basis to deny it.
What does it mean to conduct a reasonable investigation?
The insurance company has a duty to conduct a reasonable investigation into an insurance claim. What is reasonable depends on the circumstances. At a minimum, a reasonable investigation does the following:
- It considers the claimant’s interests
- Gathers their own information, rather than just waiting for the claimant to provide all of it
- Looks at all sides rather than only looking for ways not to pay
- Use the same degree of care that a person would use in the management of their own affairs
See Arnold v. Nat’s Co. Mut. Fire Ins. Co., 725 S.W.2d 165 (Tex. 1987). In Arnold, the victim was injured in a motorcycle accident. They were hit by an uninsured motorist. The victim sued the insurance company for breach of good faith and fair dealing under the Deceptive Trade Practice Act and the Texas Insurance Code. The court stated the insurance company’s duty of good faith arising from the special relationship as a party to a contract.
In Viles, supra, the insured brought a claim on a homeowner policy. They had moisture damage to the wood foundation of their house because of a leaking shower pan. They reported the claim to the insurance company but didn’t provide proof of loss within 91 days, as required by the policy.
The insurance company investigated the claim. They sent an inspector. Ultimately, the insurance company offered a $3,000 settlement – far less than the amount claimed. The insured brought a claim for breach of contract and breach of good faith and fair dealing.
The Viles court said the special relationship between the parties imposes on the insurance company the duty to investigate in good faith. They said that an action for breach of good faith and fair dealing is a separate action in tort from the original breach of contract. They said that the jury was not required to receive the question of submission of the proof of loss for the breach of good faith claim. However, the actions of each party may be a relevant factual issue.
Whether the insurance company investigated and whether they investigated thoroughly enough is a factual question that depends on the circumstances of the case. The claim must focus on what the insurance company did, along with evidence and arguments about the reasonableness of those actions.
Contact Our Insurance Bad Faith Attorneys
Not every delay or slow investigation is the result of bad faith. However, there are circumstances where the insurance company falls short of its obligations towards the insured. If that is the case, we want you to get justice and the financial relief you need. After all, that’s why you bought insurance.
Our legal team at Haun Mena can help you evaluate whether a fair investigation occurred. We can look at ways for you to get fair payment and hold the insurance company accountable for their obligations.
Contact us today to learn more and begin your case.