Currently Browsing: Insurance Bad Faith

What Happens in the Case of Insurance Bad Faith

Insurance is one of those necessary evils of our lives. We pay into it on a monthly, or yearly basis so that it will cover us when we need it most. Most of the time we don’t use our insurance (or hope that we don’t use it) because we’re healthy, haven’t gotten into an accident, etc. However, when we do need it, we hope that it will come through for us after everything we’ve paid into it. When it doesn’t, it leaves people with a real problem on their hands. Something they paid for isn’t doing its job, and they have a big bill they were banking on being paid for by their insurer.

Bad faith insurance is a huge punch in the face for those who are counting on it most. When an insurer delays or withholds payment of a policyholder’s insurance claim that it knows is reasonable and clear, the insurer may have acted in bad faith. The relationship between the insurer and the insured is an important one, and the insured relies heavily on the insurer in times of need. It doesn’t matter whether an earthquake hit and you lost your home or hail damage put dents in your car; you should be covered promptly. Texas law demands that insurance carriers deal with their policyholders in good faith in both common law and statutory law situations. Common law situations are those that arise from particular cases, while statutory law situations are those that are based in written, codified law.

Common law claims by policyholders usually occur due to insurance companies abusing their size, superior knowledge and wealth to benefit themselves at the expense of the policyholder. When insurance companies use this to their advantage over their policyholders, said policyholder might be able to bring forth a bad faith claim. For these claims, an attorney will be best utilized to help. Not all denied insurance claims are done in bad faith, and an attorney is well equipped to realize this, even while fighting for you. 

Conversely, an attorney will know just as well if an insurance company has acted in bad faith. They may be able to seek compensation based on the insurance claim and damages done due to lack of payment. It’s critical to hire an attorney when dealing with bad faith insurance claims, because the insurance company will rarely give their policyholders the benefit of the doubt, and will rarely be looking to fight in your favor. An aggressive, attentive attorney will be on the lookout for bad faith behavior in your insurance carrier’s correspondence with you and will make every effort to secure what you deserve. In cases where bad faith has been practiced, your attorney may be able to seek additional damages for the harmful behavior. We count on our insurance to cover us in times of need, and they shouldn’t be able to avoid that responsibility.