Callender Bowlin is a Houston bad faith insurance lawyer. We represent insured parties.
If the insurance company has wrongfully denied or delayed your payment, contact us now.
Lawyers for Insurance Bad Faith in Houston
If the insurance company has unreasonably delayed or denied your claim, you may pursue an insurance bad faith lawsuit. Your case may result in payment of the claim plus damages and penalties.
Callender Bowlin is a team of experienced lawyers who handle bad-faith claims in Harris County. Contact us for your consultation and get legal help now from our Houston property damage attorneys.
Insurers Act in Bad Faith by Denying Valid Claims
All insurance policies in Texas have an implied covenant of good faith and fair dealing. In other words, the insurance company can’t offer insurance policies and then refuse to pay good claims. The insurance company must be honest and fair.
Broadly, bad faith is when an insurance company doesn’t honor its policy. It’s more than an honest dispute about what’s covered. Bad faith is when it’s clear that the insured has a valid claim, and the insurance company doesn’t have a good reason for not paying.
Bad faith insurance claims are often combined with breach of contract claims.
English v. Fisher, 660 S.W.2d 521 (1983).
Grounds for Insurance Bad Faith in Texas
There are several laws and legal grounds that can be used for an insurance bad faith claim in Texas:
- Common Law. General principles of good faith and fair dealing under Texas common law.
- Chapter 541. Texas Insurance Law, Unfair Methods of Competition and Unfair or Deceptive Acts or Practices.
- Chapter 542. Texas Insurance Law, Unfair Claim Settlement Practices Act.
- Texas Deceptive Trade Practices Act. Chapter 17 of the Texas Business & Commerce Code.
Most bad faith claims are pursued under Chapter 541 and common law, but our lawyers can explore all grounds for a claim. It’s common to bring both a breach of contract and a bad faith claim, but the two claims are distinct.
Chapter 541 Prohibits Unfair Insurance Settlement Practices
Texas Insurance Code § 541.060 lists unfair settlement practices:
- Misrepresentation. Misrepresenting facts or insurance coverage.
- Failing to settle. Failing to settle a case promptly or equitably when insurer liability is clear.
- Unreasonable influence. Failing to settle a case promptly or equitably to influence settlement under another portion of coverage.
- No explanation. Not explaining for denying a claim.
- Coverage. Not affirming or denying coverage in a reasonable period of time.
- Third party delays. Refusing or delaying a settlement in hopes of third-party coverage or responsibility.
- Partial payment. Enforcing full release of claim when it’s a partial payment, except when it’s a compromise of a
disputed claim. - Investigation. Refusing to do a reasonable investigation.
- Tax returns. Requiring tax returns, unless specifically allowed in certain circumstances.
In addition, § 541.061 prohibits insurance company misrepresentation of facts and failing to make required disclosures.
Chapter 542 violations
Chapter 542 creates claim timelines that insurers must follow. They must acknowledge a claim within 15 days. When a claim is complete, the insurance company has 15 days to decide coverage. If the claim is accepted, they must pay within five days.
A 60-day payment delay may trigger an 18% interest penalty.
Case Study
Southwest Airlines v. Liberty Insurance Underwriters shows how a computer malfunction produced $77 million in losses
How does a computer malfunction turn into a $77 million insurance dispute? In Southwest Airlines v. Liberty Insurance Underwriters, a computer malfunction did exactly that. In 2016, a massive system outage hit Southwest, affected roughly 500,000 customers, and caused about $77 million in losses.
Southwest made a claim under its cyber-risk excess policy, and Liberty denied it — arguing the losses fell below the policy’s payment threshold and that some categories, such as the rewards points and reimbursements Southwest gave affected customers, were business decisions rather than outage losses. Southwest sued for bad faith. The court worked through the policy terms, drawing on Texas law and dictionary definitions to interpret the key language.
The court held that bad faith requires the absence of a reasonable basis to deny the claim, found that Southwest had offered enough evidence to survive the insurer’s summary-judgment motion, and remanded for further proceedings. The lesson: bad-faith claims can carry large dollar amounts, and the insured has to be ready with evidence and counterarguments to defeat defense maneuvers like summary judgment at the right moment.
Source: Southwest Airlines v. Liberty Insurance, No. 22-10942 (5th Cir. 2024).
Why Choose Callender Bowlin
Choosing the right law firm to assist you with your hurricane insurance claim is crucial, and there is no better choice than Callender Bowlin. For years, our law firm has provided its many clients with transparent and dedicated professionals to help them better understand their rights and fight for fair compensation.
Bad-Faith Conduct Exposes Carriers to Additional Damages
Bad faith damages depend on the losses and the law that applies.
Chapter 541
§ 541.152 lists remedies for Chapter 541 bad faith violations:
- Actual damages (losses that result from bad faith)
- Court costs
- Attorney fees
- Triple damages (for knowing violations)
- Other relief the court deems proper
Note: § 541.154 requires the party seeking Chapter 541 damages to provide written notice in advance of the claim, unless an exception applies.
Common law
- Contract damages (value of the policy)
- Losses that result from failure to pay
- Mental anguish resulting from failure to pay
- Attorney fees (may be payable through an accompanying breach of contract claim)
Chapter 542
- 18% penalties
- Court costs
- Attorney fees
- Triple damages (for knowing violations)
Texas Deceptive Trade Practices Act
- Economic losses
- Mental distress
- Triple damages (for knowing violations)
- Court costs
- Attorney fees
- Other equitable remedies
As you can see, many of the remedies overlap. Between the different laws, there are varying requirements for claim notices and other procedures. Our lawyers evaluate the possibilities and pursue the most viable grounds for a claim.
Policyholders Must Show the Insurer’s Liability Was Clear
Underlying any bad faith claim is the insurance claim. Generally, an insured cannot recover bad faith damages if they don’t have the right to contractual benefits under the insurance policy. It’s a bit more complicated than that, because there may be liability for independent injury. But generally, the insured cannot recover actual damages caused by the statutory violation if the insured has no right to receive benefits under the policy.
That means proving the underlying insurance claim is important. Our lawyers review your policy coverage. We document your losses. Our lawyers understand that insurance bad faith claims are multi-faceted. We build the proofs and create a case strategy that is specific to the law and the facts of the case.
Source: USAA Texas Lloyd’s Company v. Menchaca, 545 S.W.3d 479 (Tex. 2018).
Case Study
In re Ace American Insurance Co. lets an insurer compel appraisal despite a bad-faith allegation
Can an insurer force appraisal even after the policyholder alleges bad faith? In In re Ace American Insurance Co., the Texas Supreme Court said yes. A water line ruptured at a Dallas food-distribution warehouse, the insurer invoked the policy’s appraisal clause, and the insured resisted, alleging bad faith.
The court held that a coverage dispute does not defeat the right to appraisal, and directed the lower court to let the insurer invoke the clause. It emphasized that appraisal is limited to determining the amount of loss — it does not interpret the policy or decide liability.
For a policyholder, the lesson cuts both ways: appraisal can be compelled even when you would rather litigate, and it will not resolve your bad-faith claim, so you need counsel who understands how the appraisal clause interacts with your policy and your other remedies before the carrier uses it against you.
Source: In Re: Ace American Insurance Company, 25-0461 (2026).
Time Limits for Insurance Bad Faith Claims
You have only a limited amount of time to bring an insurance bad faith claim. In Texas, the statute of limitations for bad faith is generally two years. But there can be disputes about when the time limit begins to run. Claims for breach of contract are generally four years, but can be contractually shortened to two years.
Never wait to contact a lawyer.
Callender Bowlin Tries Bad-Faith Insurance Cases in Houston
There are several reasons that having a lawyer is especially important for a bad faith insurance case in Houston. Here’s how our bad faith lawyers assist our clients.
- Case evaluation. We evaluate your case for whether bad faith has occurred.
- Claims. We know statutory and common law remedies.
- Procedure. Our lawyers know the steps for a claim.
- Damages. We make sure that you claim all damages you may deserve.
- Developments. Our lawyers are up to date on the latest developments in the law, including Mirelez v. State Farm Lloyds, 127 F.4th 949 (5th Cir. 2025) and Ortiz v. State Farm Lloyds, 568 S.W.3d 156 (2019). (discussing how appraisal payments affect bad faith tort claims).
- Reputation. When you hire our law firm, the insurance company knows that you have the backing of an experienced and proven legal team.
Callender Bowlin represents insured parties in bad faith claims in Harris County and surrounding areas. We are trial lawyers, resolving claims in litigation and by settlement.
Contact An Experienced Houston Bad Faith Insurance Lawyer Near You
Get help from a Callender Bowlin Houston bad faith insurance lawyer. Start with a free consultation. We are taking new claims. Call or message us now.
