Texas Insurance Attorney

What is Bad Faith Insurance?

Your right to fair treatment arose from common law, which means the right was created through the courts instead of statutes. Today, your right to good faith and fair dealings is also established in the Texas Insurance Code, Chapter 541, Unfair Methods of Competition and Unfair or Deceptive Acts or Practices, and 542, Processing and Settlement of Claims.

Under the law of good faith and fair dealings, an insurer must:

• Promptly and properly investigate the claim;
• Fairly consider the evidence;
• Conduct an honest evaluation of liability for the claimant’s injuries;
• Honestly interpret the insurance policy in regard to the claim;
• Correspond with the claimant regarding the claim;
• Consider the likelihood of the claimant suing and winning;
• Consider the possible amount of a verdict in the claimant’s favor;
• Make an honest attempt to resolve the claim within a reasonable amount of time;
• Approve or deny the claim;
• Provide a written explanation of a denial; and
• Enter into good faith negotiations regarding an insurance settlement.

Do You SuspectBad Faith?

If you filed an insurance claim after an accident, and you believe the insurer is acting in bad faith by violating these requirements, contact an insurance claims attorney right away. By hiring an attorney, you will have someone with the knowledge and experience necessary to review your situation. This ensures you receive an objective opinion regarding whether an insurer is acting within the law or in bad faith.

When you have a valid insurance claim dispute concerning a bad faith tactic, your attorney can pursue the proper recovery for your original accident, and additional compensation related to the insurer’s illegal conduct.

The Stowers Doctrine in Texas

When learning about bad faith insurance practices in Texas, you will come across the Stowers Doctrine. This is the name given to the duty of good faith and fair dealing the insurance company owes when dealing with a third-party claim against a customer’s policy.

For example, say there was a car accident, and the other driver claims you are at fault. The other driver files a personal injury lawsuit against you, which you notify your insurer of. The Stowers Doctrine refers to their responsibility to you and to handle the process appropriately.

The Stowers Doctrine requires the insurer to exercise the degree of care and diligence an ordinarily prudent person would in managing their own business and negotiating a settlement. The duty is specifically relevant when the other party, the claimant, makes a settlement demand when:

• The claim against the policy is within the scope of the policy’s coverage;
• The demand is within the policy limits; and
• The terms of the demand are such that an ordinarily prudent insurer would accept it, considering the insurer’s potential liability if exposed to a court verdict.

If your insurance company is handling a claim against you, and you believe it is not doing so in good faith, call an insurance dispute lawyer at The Law Giant, Personal Injury & Accident Lawyers as soon as you can. It is imperative you get the claim on the right track as soon as possible to avoid more serious problems down the road.

Examples of Bad Faith Insurance Practices

At The Law Giant, Personal Injury & Accident Lawyers, our insurance dispute lawyers have worked with all the major insurance companies over the years. We know the ins and outs of the insurance process, and tricks adjusters use to deny claims or try to limit your compensation. We know how an insurance company should act, and we know what it looks like when they violate the law.

Some examples of when an insurer acts in bad faith include:

• Delaying the investigation into your claim without reasonable justification.
• Failing to conduct a proper and efficient investigation of your claim.
• Delaying the processing of your claim without reasonable justification.
• Making unreasonable and additional demands for duplicate information or documentation.
• Transferring your claim among numerous claims adjusters to delay the process.
• Lying about, misrepresenting, or misinterpreting the policy language to avoid liability.
• Misinterpreting Texas’ law to avoid liability.
• Lying about or misrepresenting other documentation or records to avoid liability.
• Altering or canceling the insurance policy after you filed a claim.
• Denying your claim without conducting an investigation.
• Denying your claim in violation of the policy.
• Denying your claim without providing a reasonable explanation in writing.
• Accusing you of fraud without a reasonable justification for doing so.
• Threatening you or making inappropriate statements toward you.
• Failing to decide your claim within a reasonable amount of time.
• Failing to maintain reasonable communication with you.
• Making an unreasonably low settlement offer and refusing to negotiate.
• Harassing or pressuring you into accepting an unreasonably low settlement offer.
• Delaying payment after resolving your claim.

There is a lot an insurance company can do that they shouldn’t. Yet, it can be hard to notice it is happening in the midst of your claim. This is why it is so important to call an insurance bad faith attorney as soon as something feels wrong. The minute you think you are getting the runaround, or the moment an insurance adjuster is rude or inappropriate toward you, you should call us.

You have the right to be treated fairly during the insurance claim process. If you are not, then you may have a separate bad faith claim against the insurer, which could entitle you to compensation.

Your Rights After Insurance Bad Faith

You have the right to good faith and fair dealings with an insurer. If an insurance company violates that right, then you can file a lawsuit against it. You have the right to pursue compensation based on the insurer’s unlawful conduct. In these cases, your potential damages will depend on the insurer’s unlawful conduct and your specific financial injury.

Your right to a fair insurance claims process is true whether you file a first-party claim, which would be against your own insurance policy, or a third-party claim against another person’s policy. Although, your rights and legal options may differ depending on whether you are the insurer’s direct customer or not.

For example, if you are part of a first-party claim, then your bad faith lawsuit may be based on breach of contract or a breach of the common law. However, if you are a third-party claimant, you cannot allege breach of contract. You can allege the insurer violated Texas law, though.

Our Texas Insurance Attorneys Can Help

Two of the most common issues we see are insurers wrongly denying a claim or refusing to negotiate a settlement appropriately. If an insurer denied the claim when the other party’s liability was obvious, and it should have approved it, then talk with our insurance lawyers about suing an insurance company for denying the claim.

If the insurer refused to negotiate a settlement, or an adjuster tried to harass or bully you into accepting the low settlement, call us to discuss filing a lawsuit against the insurer for a bad faith insurance settlement.

These issues also can significantly affect you if you are the policyholder. If your insurer wrongly denied or refused to settle a claim against you appropriately, and then a court finds in favor of the other party, making you liable for a significant amount, call us right away. As your insurance company, it should have protected you.

In any of these situations, you are going to need lawyers who sue insurance companies, not simply attorneys who handle the insurance claim process. Many personal injury and wrongful death lawyers work with insurers on behalf of their clients. They are well-versed in obtaining compensation. That does not mean they are experienced in filing bad faith insurance claims in Texas.