We rely on insurance to help us out of financial trouble when an accident occurs. However, not all insurance companies treat claimants fairly.
If you have been treated unfairly by an insurance company, you might need to file a claim against them for bad faith. Insurance companies in Texas are held to numerous standards to ensure fairness and efficiency in the claims process. However, insurance companies use many tactics to deny or frustrate your claim. Our team can investigate to determine if their reasons are valid or merely a cover for their bad faith conduct. Our team can review each stage of the claims process to see where the violations occurred. Our team can help you prove bad faith against another person’s insurance or your own. In either case, the law requires that you be treated justly.
For your free review of your claim with our Dallas bad faith insurance attorneys, contact The Queenan Law Firm, P.C. at (817) 476-1797.
What Can I Show to Prove an Insurance Company is Acting in Bad Fath in Texas?
Some insurance claims are denied for valid reasons, like lack of documentation or evidence of liability. However, insurance companies are notorious for denying claims for frivolous reasons to save themselves money. When an insurance company denies or fights your claim without good cause in Texas, it is known as “bad faith.” Bad faith conduct can take many forms and is sometimes hard to spot. Our Texas bad faith insurance lawyers can determine if your insurance company is acting in bad faith and what it takes to prove it in a lawsuit. Whether you are suing your own insurance company or someone else’s, we can help.
Texas law prohibits all insurance companies from engaging in several practices that have been deemed unfair. These laws include the Unfair Methods of Competition and Unfair or Deceptive Acts or Practices Act under Tex. Ins. Code § 541.003, and the Unfair Claim Settlement Practices Act under § 542.003. The following actions are prohibited by law and can show an insurance was acting in bad faith:
Your Policy Was Cancelled After You Made a Claim
A fairly obvious example of bad faith is when the insurance company cancels your policy right after you file a claim. If you have been paying your premiums in full and on time, they have no right to cancel your policy to get out of paying a claim. If the insurance company offered you a flimsy reason for the cancellation after you filed your claim, we can review it to see if it is merely a cover for its bad faith.
Claims You Failed to Pay Premiums When You Did
Another way to prove an insurance company’s bad faith is if they claim you did not pay your premiums when you did. This can be easy to show if you made payments each month by providing bank statements and policy invoices as proof.
Denied Your Claim without Reason
According to § 541.060(a)(3), it is bad faith for an insurance company to not provide a reasonable explanation for the denial. If your claim is denied or they offer you a settlement amount lower than what you demand, the insurance company must explain the facts of the case or relevant law on which they base its decision. A simple statement that your claim has been denied will not suffice and can show bad faith if not corrected.
Failed to Promptly Pay a Fair Settlement
Insurance companies must also attempt in good faith to settle claims where liability has become clear, as per § 541.060(a)(2)(A) and § 542.003(b)(4). Many insurance companies will use this excuse to deny claims, usually by fighting the evidence you provided. Our attorneys can help you collect the evidence you need to show liability in your particular case before filing your claim. This way, they are more likely to start with a reasonable settlement offer.
Misrepresented Facts of Policy Provisions
Another common trick insurance companies use that can prove they acted in bad faith is when they misrepresent facts or policies important to the claim. According to § 541.061 and § 542.003(b)(1), misrepresentation can take many forms.
It is misrepresentation to make an untrue statement about a material fact. It is also misrepresentation to withhold a fact necessary to understand other facts in the claim. Insurance companies are also prohibited from misleading a reasonable person to a false conclusion about a material fact.
We can also prove bad faith if the insurance company made a misstatement of relevant law or failed to disclose an issue the law required it to.
Failed to Acknowledge a Claim
According to § 541.060(a)(4)(A) and § 542.003(b)(2), an insurance company’s failure to respond to a claim is also evidence of bad faith. The law places tight deadlines on insurance companies to process claims.
- 542.055(a) provides insurance companies 15 days to acknowledge a claim. They have 15 additional business days to investigate the claim. If the claim is denied, the insurance company must notify the claimant by the end of those 15 days. If the claim is accepted, § 542.057(a) allows insurance companies five business days from the date of acceptance to make full payment.
Violating any one of these deadlines can be construed as bad faith conduct.
Failed to Investigate a Claim
Insurance companies have a duty to investigate valid claims before denying them, according to § 541.060(a)(7) and § 542.003(b)(3). You can reasonably conclude that the insurance company did not investigate your claim if the denial did not state any reasons, which is a violation itself. They might not have reviewed any of the evidence you provided, even if it proved liability. However, most insurance companies do their due diligence when a claimant is represented by legal counsel.
Attempts to Get a Full Release from Liability without Making Full Payment
In some cases, an insurance company might attempt to get you to sign a release before paying your settlement in full. As a general rule, never sign anything the insurance company asks you to without having our attorneys review it first. If you sign a release of liability after the insurance company has paid, you might not be able to fight it.
If you sign a release without receiving full payment yet, you could challenge it in a bad faith lawsuit, as per § 541.060(a)(6) and § 542.003(b)(7).
Requesting Tax Returns as a Condition for Settlement
It is also an act of bad faith to demand a claimant’s federal income taxes during the investigations, according to § 541.060(a)(9) and § 542.004. Unless the claim involves a fire, lost profits, or is court-ordered, an insurance company cannot request tax returns as a condition of settling without acting in bad faith.
Our Texas Bad Faith Insurance Lawyers Can Help You Prove Your Case Today
Call The Queenan Law Firm, P.C. today at (817) 476-1797 to get a free case assessment with our Arlington, TX bad faith insurance lawyers.