Rights and Remedies in Texas Insurance Bad Faith Cases

June 14, 2023

Rights and Remedies in Texas Insurance Bad Faith Cases

You always trust your insurer to behave in good faith and uphold their commitments when you buy an insurance policy. But there are times when insurance providers behave deceitfully, particularly rejecting or delaying legitimate claims, underestimating losses, or failing to conduct a full investigation. Policyholders in Texas have rights and remedies to defend themselves in such circumstances.

As you read on, we will discuss the value of working with a Callender Bowlin attorney to handle insurance bad faith situations and obtain the reimbursement you are entitled to.

What is insurance bad faith?

When an insurance claim is unjustly denied or improperly handled by the insurer, it is deemed to as acting in bad faith. It happens when an insurance provider disregards its contractual commitments or uses dishonest tactics, prioritizing its own interests over those of the policyholder. Bad faith endeavors include unjustifiably rejecting a claim, conducting inadequate investigations, or postponing claim payouts without good cause.

Principles of the law relating to bad faith insurance

The concept that an insured person has a considerable disadvantage in the claims procedure and in engaging in litigation against the insurance provider is the basis for Texas’ bad faith stipulations. In general, a plaintiff ought to demonstrate that an insurance provider’s actions were irrational and that the firm was aware of it as a means to prove bad faith.

Statutory violations operate similarly to strict liability, and the insurer can be held accountable for damages incurred due to unjustified postponements in response to and settling claims and for misrepresentations concerning the insurance policy or coverage. Statutory violations, on the flip side, function much like strict liability, and the actions taken must be “egregious,” in the context of one Texas court ruling on this matter.

Understanding Insurance Bad Faith Claims

Insurance bad faith may manifest in various ways, such as:

  • Unreasonable rejection of a legitimate claim
  • Not carrying out a sufficient investigation
  • Undervaluing the losses of the policyholder
  • Putting off claim payments without good reason
  • Lack of a plausible justification for a claim denial

Texas Policyholders’ Rights

  • Right to Fair Claims Handling

In Texas, you have an entitlement to equitable claims processing as a policyholder. This implies that insurance firms are required to promptly, completely, and honestly resolve claims. They cannot unfairly refuse to pay out claims, postpone payments, or use dishonest tactics.

  • Right to Prompt Payment

Texas policyholders are entitled to quick payment. As soon as culpability is assertively established, insurers are required by law to swiftly pay claims. This requirement’s noncompliance may be construed as bad faith.

  • Right to Full Compensation

When you submit a legitimate insurance claim, you are entitled to the full settlement for your losses. Insurance firms shouldn’t minimize or underpay your claim because doing so would be acting in bad faith. You have the right to be put back in whatever position you held prior to the recovered loss.

Remedies for Policyholders in Texas

Submitting a Complaint

The Texas Department of Insurance (TDI) is the agency that you ought to go to if you suspect your insurance provider is acting in bad faith. As an outcome of its investigations into complaints, TDI penalizes insurers who are found to have broken the law.

In Texas, the burden of proof for a bad faith claim is with the insured party. Two options exist for carrying this out to be the case:

  • If you can demonstrate that the insurance provider rejected your claim despite the fact that liability was arguably obvious, or
  • By demonstrating that the insurance provider engaged in one of the actions forbidden by Chapter 541 of the Texas Insurance Code (called the “Unfair Methods of Competition and Unfair or Deceptive Acts or Practices Act”) or Chapter 542 of the Texas Insurance Code (recognized as the “Unfair Claim Settlement Practices Act”), you can prove that the insurance provider engaged within among of the prohibited activities.

Seeking Legal Assistance

It is essential to retain a bad faith insurance lawyer with experience in managing such situations if you want to maneuver insurance bad faith cases successfully and make sure your rights are safeguarded. In Texas, Callender Bowlin has a reputation for fighting for policyholders’ rights and collecting the settlements they are due.

What types of damages can I collect from a successful bad-faith claim?

If your Texas bad faith claim prevails, you could be awarded the following:

  • Court costs, interest, and legal fees
  • If you can demonstrate a willful or knowing infringement, the firm ought to pay as much as three times what it would’ve paid if your claim had been managed correctly.
  • Punitive damages (very difficult to acquire, but technically feasible) to hold the insurance provider accountable for unacceptable conduct
  • In some circumstances, mental distress (apart from where the plaintiff is a company)

Importance of Hiring a Lawyer from Callender Bowlin

Callender Bowlin focuses on matters involving insurance bad faith, and its lawyers have a great deal of experience and knowledge in this field of law. They are aware of the difficulties, and they can effectively assess your claim, put out a compelling defense, and negotiate with the insurers on your behalf.

By working with a Callender Bowlin attorney, you acquire a committed ally who will defend your policyholder rights. They will ensure that insurers uphold their duties and give you the funds that you are due by holding them responsible for their conduct.

Additionally, Callender Bowlin’s attorneys are excellent negotiators who know how to get their clients reasonable settlements. They will put out a lot of effort to increase the worth of your claim while avoiding unfair insurance provider practices.

Finally, Callender Bowlin has the litigation expertise required to take your matter to trial if an equitable agreement cannot be achieved via negotiation. They will speak for you in court, arguing your case persuasively to get the repayment that you are due.

Frequently Asked Questions

In Texas, what constitutes insurance bad faith?

In Texas, insurance bad faith can take the form of unreasonable claim denial, improper investigative failure, loss undervaluation, unjustified claim payment delays, and failing to offer a plausible justification for a claim denial.

How long do insurance companies have to settle a claim in Texas?

Once responsibility is substantially apparent, insurance firms in Texas are expected to pay claims promptly. This requirement’s noncompliance may be construed as bad faith.

Why do I need legal representation in a case of insurance bad faith?

Obtaining a lawyer with experience in insurance bad faith lawsuits can help you be confident that your entitlements will be vigorously defended by someone who is familiar with the law. They can increase your chances of getting the just compensation you are entitled to by negotiating fair settlements, and providing court representation when needed.

Obtain Your Bad Faith Insurance Lawyer from CB Trial Today

Policyholders who experience insurance bad faith may feel miserable and powerless. Texas policyholders can, however, fight back against unfair tactics by being aware of their rights and remedies. We at Callender Bowlin consider the partnership between our business and clients to be a trust of faith. Our commitment to defending the interests of our clients comes first in all we do. Reach us at (713) 955-9719 or via our form if you suspect an insurance provider dealt with you in bad faith. We provide no-cost consultations and only collect fees if you prevail. Let us help you right now.