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Suing an Insurer for Bad Faith

By October 22, 2019Insurance Companies

Texas law is very clear that an insurer must act reasonably toward its policy holder. Unfortunately, the insurance industry has developed a reputation for sometimes failing to properly settle claims when there is no reasonable ground for doing so. Any search on the Internet will show that insurers often anger the very people they are supposed to look after.

At DC Law, we understand that people pay high insurance premiums with the expectation that they can tap their insurance when they need it. We also know how to bring a bad faith claim against an insurer when it breaks the law.

Examples of Insurer Bad Faith

Every insurance comes with an implied covenant of good faith. Texas Insurance Code § 542.003 also lists a series of acts that constitute insurance bad faith, such as:

  • Knowingly misrepresenting a policy provision or relevant facts about the claim
  • Failing to communicate promptly regarding the claim
  • Failing to put in place standards for a prompt investigation of claims
  • Refusing to negotiate a settlement in good faith
  • Offering too little money on a claim, which forces a policy holder to file suit
  • Not maintaining certain information

These are only some of the acts that constitute bad faith; there are others. The key is to meet with an experienced attorney to decide whether your insurer’s actions are objectionable under the law.

Compensation Available

The purpose of a lawsuit is to compensate the policy holder for any losses they have suffered as a result of their insurer’s bad faith practices. Compensation takes the form of money damages, and our clients have received damages for:

  • The actual damages they have suffered. For example, a client might have a $10,000 claim with their car’s comprehensive policy for damage. If successful in their bad faith lawsuit, they can receive the amount they are owed.
  • Court costs, such as filing fees.
  • Reasonable attorneys’ fees.
  • Other appropriate relief as ordered by the judge.

As you can see, obtaining court costs and attorneys’ fees makes hiring a skilled attorney very feasible for people with successful claims. Even if you think your insurer’s bad conduct was minor, you should still discuss your case with an attorney. The best way to force change in the insurance industry is to hold insurers accountable when they violate the law.

Treble Damages

There is also good news if your insurer knowingly violated the Chapter 541 of the Texas Insurance Code. An insured can receive treble damages, which is basically 3 times a person’s actual damages. So if you were seeking $10,000, then you could receive $30,000 in compensation for a knowing (as opposed to a negligent) error or omission.

Contact DC Law for a Free Consultation.

Are you in the midst of a dispute with your insurer? If so, please contact an Austin insurance bad faith attorney to discuss your claim. DC Law has an impressive track record of obtaining justifiable compensation for its clients. We can review your insurance policy closely and identify whether your insurer’s conduct has run afoul of the law. Call 512-220-1800 to speak with us today.