Texas law requires that insurance companies owe their customers a common law duty of good faith and fair dealing. In addition, state statutes require that insurance companies that sell policies of any kind to:
- Be truthful about facts or provisions of a policy. In other words, don’t say that something is covered when it is not, or vice versa.
- Seek a fair settlement when it is obvious that the insurance company is liable
- Investigate a claim promptly before denying it. Do not just say “No.”
- Explain clearly why a claim was denied
The notion of good faith in Texas is based upon the superior position of insurance companies compared to their insureds. The companies have superior knowledge, resources, and legal firepower that makes it easy for them to obtain and exploit an unfair advantage over their customers. That is why the law requires them to act in good faith—otherwise, they would use their advantageous position to deny more claims and make more money.
Don’t Ignore These Signs of Bad Faith After Filing an Insurance Claim
How do you know if your insurance company is treating you in bad faith? There are many clues that should make you suspicious and send you off to an attorney to learn about your rights. These include:
- Delaying the resolution of your claim without explaining why
- Not investigating promptly and thoroughly
- Not acknowledging that your claim was received
- Not offering a timely settlement when insurance company liability is obvious
- Not notifying customers of policy changes that could have affected them
- Offering or making payments without explaining what they cover
- Not explaining how the company handles appeals
- Not explaining required arbitration
- Requiring too many unnecessary forms from doctors and others
- Not explaining the reason for denying a claim
- Not explaining why a compromise amount was offered
- Withholding or misrepresenting claim information
- Trying to shift liability onto an insured by making untruthful charges such as arson or drunk driving
- Telling the inured that a lawyer is unnecessary
- Trying to discourage claims with threats and abuse
- Misrepresenting the claim’s value
Insurance companies are masters of the strategy, “Delay, deny and defend.” They use tactics such as these to protect their profits and shareholders. However, insureds can fight back by staying alert and recognizing symptoms of bad faith such as these.
Is Your Insurance Company Acting in Bad Faith? Call an Attorney to Find Out.
Contact our lawyers to learn about your legal rights and options if you suspect your insurance company is giving you the runaround. You may be able to make a bad faith insurance claim that could not only obtain a fair settlement amount but also cover your related costs. Call our bad faith insurance attorneys for more information.