Insurance companies, or insurers, have certain duties towards their policyholders, including the duty of good faith and fair dealing. For example, when a policyholder files a claim with his or her insurance company, the insurer is obligated to conduct a full and reasonable investigation into the claim. If the insurance company arbitrarily denies the claim, delays payment, or decides to pay the policyholder less than the full value of benefits owed under the policy, the insurer may be liable for the tort of bad faith. Insurance bad faith is a legal term describing a tort claim that an insured may have against an insurance company for its misconduct. In other words, when an insurance company fails to uphold the duties it owes to policyholders, the insurance company has committed a bad faith act. If you have been the victim of an insurance bad faith act, consult a Texas insurance bad faith attorney immediately.
Examples of Insurance Bad Faith
Laws governing insurance bad faith differ state by state, but the underlying standards are generally the same. Examples of bad faith acts in Texas may include:
- Intentionally denying a claim when liability is reasonably certain
- Failing to process a claim within a reasonable amount of time
- Adjusting the claim in a dishonest manner
- Any intentional misconduct in claims processing
- Failing to defend a policyholder against a third-party claim
- Failing to investigate a claim for benefits under an insurance policy
Texas Insurance Bad Faith Claims
Under the Texas Insurance Code, insurance companies underwriting any type of insurance policy in the state are required to meet certain standards of conduct, including processing claims within a certain amount of time. Texas insurance policyholders who have been victims of insurance bad faith acts have legal options available to them, including possibly receiving attorney fees, punitive damages, and any amounts owed to them under their insurance contracts. In order for an insured to establish the tort of bad faith in Texas, proof must include the following:
- The absence of a reasonable basis for denying or delaying payment of benefits under the policy
- That the carrier knew or should have known that there was no reasonable basis for denying the claim or delaying payment
However, Texas law dictates that as long as the insurer has a reasonable basis for denying the claim or delaying payment, even if that basis is ultimately deemed erroneous, the insurer is not liable for the tort of bad faith.
Contact a Texas Insurance Bad Faith Attorney Today
Too often, policyholders fall victim to bad faith acts on the part of insurance companies and believe that it is not in their power to defend themselves. This is not the case. Insurance companies in Texas and across the country have an obligation to provide their policyholders with a certain standard of conduct, and may be held liable for any deviation from this conduct. If you or a loved one has been victimized by bad faiths acts by an insurance company, contact a Texas insurance bad faith attorney today. You may be entitled to financial compensation for punitive damages and attorney fees, in addition to compensation owed to you under your insurance contract. With the help of a qualified Texas insurance bad faith lawyer, you can protect your legal rights and ensure that your insurance claim is handled professionally and appropriately.