Recognizing Insurance Companies' Bad Faith Tactics
Oct. 14, 2021
Ever filed a claim with an insurance company for an auto, property, personal injury, or other loss and been given the runaround, had your claim denied, or were offered what seems like pennies on the dollar? If so – and it happens too frequently – you may have been the victim of an insurance company’s “bad faith” tactics.
Under both Texas statutes and common law, insurers must observe a “good faith covenant,” meaning they must act promptly and honestly in response to a legitimate claim. When they don’t, the policyholder has the right to seek restitution.
If you feel you’ve been victimized by insurance company bad faith tactics in or around Corpus Christi, Texas, or the Dallas Fort Worth area, contact The Torres Attorneys. Better yet, whenever you file a claim, or start being subjected to delays and tricks by your claims adjuster, let us take over negotiations for you. We know how to stand up to the bad faith tactics of the insurance companies.
Examples of Bad Faith Tactics
The list is almost endless, but the way you can spot bad faith insurance tactics is by observing any of the following actions conducted by the insurance company:
They continue to delay
They do not even acknowledge receipt of your claim
They fail to conduct a prompt and thorough investigation
They try to get you to accept less than a reasonable person would consider fair
They require you to submit multiple but similar forms from physicians
They request unnecessary documentation
They misrepresent policy information and promises
They treat you like an adversary
They try to pin the blame on you and try to get you to admit fault
Texas Law on Insurance Companies & Claims Processing
The Texas Insurance Code contains two chapters governing insurance companies and their obligations for claims processing. Chapter 541 is known as the “Unfair Methods of Competition and Unfair or Deceptive Acts or Practices Act,” and Chapter 542 is known as the “Unfair Claim Settlement Practices Act.”
Chapters 541 and 542 prohibit an insurance company from committing “unfair or deceptive acts or practices in the business of insurance,” which include:
Refusing to pay a claim without conducting a reasonable investigation
Misrepresenting a policy provision or material fact related to the claim
Failing to affirm or deny coverage within a reasonable period of time
Failing to promptly explain the basis for a denial of your claim
Failing to attempt in good faith to reach a fair and equitable settlement when liability is reasonably clear
Time Limits Set by Law
Texas law, as described above, requires insurers to settle claims within 35 business days. They have 15 business days after a claim is filed to acknowledge it by forwarding the instructions and paperwork needed, including proof-of-loss forms, which serve as a sworn statement by the policyholder as to the extent of the damage or injuries. The insurers then have 5 business days to make the final payment once the claim is approved.
Bad Faith Lawsuits & Damages Available
In general, if your insurer has denied or lowballed your claim and used bad faith tactics to do so, you can file a bad faith lawsuit. If you prove that the insurer acted unreasonably and in bad faith, you can recover:
The amount of your actual damages, or losses
Court costs and reasonable attorney’s fees
Any other relief the court deems necessary
On top of that, you can recover three times your damages if you can show that your insurer “knowingly” violated Chapter 541 of the Texas Insurance Code.
Your Attorney’s Role in Settlement
Your best option is always to involve an experienced attorney from the beginning, especially if you’re dealing with something more than a routine fender-bender or bumper scratch. An attorney can hold the insurance adjuster’s feet to the proverbial fire. Otherwise, the adjuster may keep delaying action and requesting further documentation in hopes you just give up.
If you’ve already been the victim of bad faith tactics, a lawsuit to recover what the insurer denied or lowballed to you is sometimes an option. Either way, you need to contact The Torres Attorneys immediately. Don’t let the insurance company cheat you or treat you like the guilty party. We know how to handle the insurance companies and their adjusters, and we can pursue legal action if warranted. We proudly serve clients in Corpus Christi and throughout the Dallas and Fort Worth areas.