You may assume that it is in the best interests of an insurance company to settle claims filed by its policyholders quickly and efficiently, but in practice, things do not always work out this way. Insurance providers will often intentionally impose unreasonable claim delays with the purpose of frustrating the policyholder into accepting less than he or she deserves in payment for the claim.
They know that a policyholder who has submitted a claim for coverage is in a position of considerable financial need and distress, and that by making the individual wait longer, they can often coerce a settlement for a significantly lower amount. In other cases, the insurance company may refuse to settle altogether, unjustly denying any type of payment for the claim. They may deny the claim without conducting an investigation, or they may investigate the damage but then dispute the validity of the claim.
An insurance company does not have to pay on every claim it receives from its policyholders, but it is required to act in good faith toward its customers and to fulfill its obligations under the terms of the policy. If it can be proven that your insurance company has knowingly refused to settle your claim without good cause, or has intentionally cheated you out of the coverage for which you have been paying – known as bad faith – you may be able to claim monetary damages in addition to the fair value of your original claim.
Texas law governing your insurance company’s duty to settle can be intricate and convoluted. Just because your insurer is refusing to settle doesn’t necessarily mean they can be held fully responsible in court. Our skilled team of Beaumont bad faith insurance attorneys is familiar with the legal boundaries that hold these insurance companies accountable in court. If your insurer is failing to settle, it’s important to have a basic understanding of these boundaries as well.
Let’s suppose you own a business that sees frequent foot traffic. One day someone slips and falls down a set of stairs where a leak from the ceiling has been collecting water. There was no warning sign, and you are held fully accountable for injuries which, when it’s all said and done, amount to $750,000. You go to your insurance company for the coverage, but they refuse.
Your next step might be to take the company to court, but they would not be held accountable for a bad faith claim. In Texas, insurance companies cannot be held accountable for claims that exceed a policy’s limits. If you approached your insurer with an amount that was within your policy’s limits, and they refused it, they may be held responsible for the maximum amount outlined in your policy.
Now let’s assume you are the CEO of a major pharmaceutical company that has released a defective drug and has been faced with a swarm of lawsuits amounting to $5,000,000. You immediately enter into a settlement agreement without consulting your insurance company, expecting them to cover the full amount you owe. After all, if they refuse to cover the $5,000,000, then you could take them to court on a bad faith claim, right? This is not how it works. If your insurer can show that you entered into a settlement agreement without their consent, they may be released from their duty to pay.
Typically, any failure to pay a bad faith claim you bring against your insurer may only amount to the limits outlined in your contract. If you were in a car accident and your total damages exceed the coverage outlined in your contract, do not assume that you can take your insurer to court for the total amount. Extra-contractual damages may only be assessed if you can prove that your insurer committed a tort.
If you can determine that your insurance company’s failure to settle could be deemed as a tort in court, then you may be able to claim the full amount of damages. There is a wide array of punitive damages that your insurer may be held accountable for, but proving them can be tricky. A Texas insurance bad faith attorney will work closely with you to secure the compensation you deserve.
Contact Brasher Law Firm, PLLC if your insurance company has refused to settle your claim without good cause for doing so. When you purchased your policy, you entered into a contractual relationship with the insurance company, and they have a duty to live up to their side of the agreement by paying you for a valid claim. Don’t let them get away with a wrongful refusal to settle your claim for coverage.
I was very impressed with the Brasher Law Firm and the help of Nishi Kothari. Always in constant communication and keeping me informed with my case and explaining to me what was going on and taking place. Very easy process and very helpful with getting my case settled and resolved. I would definitely recommend this law firm to others that may have or experience the same problems I had with my insurance company.David Faith
I was referred to Nishi and Brasher Law Firm after my father had trouble getting paid for a claim from his insurance company. Not only did I find Nishi to be prompt, courteous and professional… but she was also extremely knowledgeable and efficient. There aren’t enough available stars for my family to express our gratitude for her service! Thank You!D. Ware