When you buy insurance, you trust the company to be there for you in times of need. Whether it’s after a car accident, house fire, or medical emergency, insurance is meant to provide financial protection.
However, what happens when your insurance company doesn’t hold up their end of the deal? In Texas, this can be a case of bad faith insurance, and you may have legal rights to fight back. This article will explain what bad faith insurance means, how it applies in Texas, the signs to look for, and what to do if it happens to you.
If you’re dealing with an unfair insurance company, this information may help you understand your options.
What Is Bad Faith Insurance?
Bad faith insurance happens when an insurance company doesn’t act honestly or fairly when handling your claim. Insurance companies are required by law to treat their customers in good faith. That means they should investigate your claim quickly, communicate clearly, and pay you fairly if your policy covers the loss.
Sometimes, insurers delay payments, deny valid claims, or make low offers without a good reason. When they do this, they may be acting in bad faith. Bad faith doesn’t just mean the company made a mistake. It means they knew—or should have known—that their actions were unfair or dishonest.
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How Does Texas Law Protect You?
Texas law gives strong protection to consumers against bad faith insurance. The Texas Insurance Code and court decisions have created rules insurance companies must follow. If they break these rules, you may be able to sue for damages.
Under Texas law, insurance companies must:
- Investigate claims promptly
- Pay valid claims on time
- Provide clear reasons for denying a claim
- Not to mislead or deceive the policyholder
If an insurer breaks these duties, they may face penalties or have to pay you more than just the amount of your claim. This can include extra money for emotional stress, legal fees, and even punitive damages.
Common Examples of Bad Faith by Insurance Companies
Bad faith can happen in many ways. Some of the most common examples in Texas include:
- Unreasonable claim delays: The insurance company takes too long to respond or investigate, leaving you in financial trouble.
- Denying a valid claim: Your claim is clearly covered by your policy, but they still deny it without a good reason.
- Undervaluing your claim: The company offers you much less than your claim is worth, hoping you’ll accept out of desperation.
- Failing to explain the denial: They deny your claim but don’t give a clear explanation or show any evidence to back it up.
- Not communicating: The company avoids calls, emails, or letters to drag out the process.
These actions can cause serious stress and financial hardship, especially when you’re already dealing with a crisis. That’s why the law gives you the right to fight back.
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How To Know if You’re a Victim of Bad Faith
It’s not always easy to tell if your insurance company is acting in bad faith. Sometimes delays or denials happen for legitimate reasons. But if you feel like you’re being treated unfairly, it’s worth taking a closer look.
Watch out for red flags such as:
- Getting different answers from different representatives
- Being asked for the same documents over and over
- Having your calls ignored or sent to voicemail repeatedly
- Receiving vague or confusing letters that don’t explain much
- Being pressured to take a quick, low settlement
If you notice these signs, it’s a good idea to speak to an attorney who understands Texas insurance laws. A lawyer can review your case and help determine whether bad faith is involved.
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What To Do if You Suspect Bad Faith
If you think your insurance company is acting in bad faith, you don’t have to deal with it alone. There are steps you can take to protect yourself:
- Document everything. Keep all letters, emails, and notes from phone calls. Write down the names of anyone you speak with and what they say.
- Ask for written reasons. If your claim is denied, ask for a clear explanation in writing.
- Stay calm and polite. Avoid angry language, but be firm. Let them know you’re keeping track of what’s happening.
- Contact the Texas Department of Insurance (TDI). You can file a complaint with TDI, and they may investigate.
- Speak to a bad-faith insurance lawyer. An attorney can look at your policy, review how the insurer handled your claim, and help you take legal action if needed.
Taking these steps can help you protect your rights and increase your chances of getting the compensation you deserve.
Contact a Houston Personal Injury Lawyer to Help You With Your Claim
Insurance is supposed to be there for you when life takes a wrong turn. If your insurance company lets you down, it can feel overwhelming and unfair, but you are not powerless. Texas law gives you the right to fair treatment, and there are strong legal tools available to protect you.
Contact the Houston personal injury law firm of Attorney Brian White Personal Injury Lawyers at (713) 500-5000.
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About the Author Brian White
Brian White earned his J.D. from South Texas College of Law in Houston and is licensed to practice in Texas. He is a Board-Certified Personal Injury Trial Lawyer.
Dedicated to giving back, he actively supports local charities and community initiatives.
Client testimonials highlight Brian’s compassion, open communication, and dedication to achieving the best outcomes for those he represents.
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