After suffering from injuries in an accident or damage to your property, you expect your insurance company to help and provide you with the compensation that you need. Unfortunately, there are times when insurance companies act unethically by prioritizing profits over their contractual obligations to policyholders.
When an insurance company acts in this way, it’s said to be acting in bad faith. Many policyholders believe they have no recourse against insurers that act this way, so they simply tolerate the bad faith practices.
If your insurance company is acting in bad faith, you don’t have to tolerate its dishonest tactics. Our experienced bad faith insurance lawyers can help you determine when and how to file a bad faith insurance claim in Texas or Louisiana.
Recognizing Bad Faith Insurance Tactics
Insurance companies use a wide variety of strategies to maximize their profits at the expense of their customers. Some of these strategies are more obvious than others. When you know how to recognize these tactics — and understand why insurers use them — you’ll be far better equipped to assert your rights.
These are some of the most common bad-faith tactics insurers use:
Refusing to Pay Your Claim Without Adequate Reasoning
If your insurance company decides that your claim isn’t covered, it’s supposed to send you a letter clearly outlining the reasons for the denial. When insurers deny claims in bad faith, they often won’t give a clear reason for the denial.
If your insurance company denies a claim and gives a vague reason as to why, it’s a good idea to reach out and try to clarify the reason. If it still seems questionable, it’s not a bad idea to reach out to a bad-faith insurance lawyer.
Unreasonably Delaying Your Homeowners Insurance Claim
Unreasonable denials aren’t the only way an insurer can act in bad faith. Extreme delays are another type of bad faith tactic. Your insurance company may take a long time to reply to your communications, or it may fail to promptly investigate your claim.
Many policyholders don’t understand how delays benefit the insurance company. Insurers usually have millions of dollars in funds at any given time, and those funds generate considerable interest. The longer the insurer can hold onto money before paying out a claim, the more interest it can generate.
Intentionally Misconstruing Policy Terms
Insurers that use this particularly devious tactic deliberately mislead policyholders about the nature of their coverage. Unless you are fairly familiar with insurance terms, you may not spot this kind of bad faith in action.
For example, imagine your car’s windshield is damaged on a road trip. You aren’t sure if your insurance covers windshields, so you call your insurer and ask. The agent you talk to reads you a section of your policy and explains that it’s saying your policy doesn’t cover windshield replacement.
Later, you consult a lawyer and realize that the passage the agent read to you actually means the exact opposite — your policy is supposed to pay for broken windshields. In this case, a bad faith insurance claim in Texas might be able to help you secure reimbursement for the windshield.
Demanding Unreasonable Proof
When you file a claim, your insurer has the right to request documentation. For example, if you’re involved in a car accident, you might send the police report for the accident, photos of the damage to your vehicle, and repair estimates from local shops.
However, if your insurance company repeatedly requests redundant or seemingly unnecessary documentation, it may be using a calculated delay tactic. Demanding unreasonable documentation drags out the claims process, which allows the insurer to generate more interest from its funds before paying out your claim.
Insurance companies that do this often hope that policyholders will give up out of sheer frustration. This may not be likely in the case of large claims. However, it’s easy to understand why someone seeking a minor reimbursement might eventually decide that dealing with the insurance company simply isn’t worth it.
Using Intimidating Behavior to Force a Settlement
Often, insurance companies will try to offer policyholders lowball settlements to see if they’ll accept. However, some take it a step further and decide to try to pressure policyholders to accept — they may use intimidation tactics to try to bully you into accepting a low settlement before you speak to a lawyer.
Proving this kind of bad faith can be challenging. However, with the help of an experienced lawyer, you may still be able to hold your insurer accountable.
When Can You File a Bad Faith Insurance Claim in Texas or Louisiana?
Insurance providers are held accountable by federal and state laws to act in good faith when it comes to actions with their consumers. Customers invest significant amounts of money in their insurance policies in case they were to suffer from an accident or any type of property damage.
However, there are some instances in which a denial of your claim is justified:
- You’re trying to receive compensation for a loss not covered by your policy
- The claim is fraudulent
- Your policy has lapsed due to non-payment
If these three factors are not present in your case and your claim was denied, you may be able to pursue a bad faith insurance claim.
Steps to Pursue a Bad Faith Insurance Claim in Texas or Louisiana
Although you can try to push back on your insurer’s bad faith tactics yourself, you’re far more likely to be successful if you work with a bad faith insurance lawyer. Broadly speaking, insurers aren’t very likely to negotiate with the policyholders themselves.
However, insurers know that an experienced attorney can easily see through bad faith tactics. They also know that if you are represented by an attorney, that attorney will likely file a lawsuit if they don’t offer a reasonable settlement.
Finding the right attorney is the first step toward filing a bad faith insurance claim in Texas. Your attorney will be able to suggest the best course of action for your case, but often, the process involves these steps:
1. Building a Case Against the Insurance Company
If you and your attorney review your policy and your attorney believes the insurer acted in bad faith, the next step is to build a case against your insurer. Your attorney will be instrumental in building your case, but there are important steps you can take as well.
Be sure to keep documentation and notes of all the conversations you have with your provider. Be detailed with your notes and keep track of the people’s names and the dates that you talk to them. It is also crucial to keep copies of any written communication about your claim.
2. Filing a Formal Complaint
Usually, you must go through the insurance company’s appeal process before taking legal action. Sometimes, the insurer will reverse its denial at this stage. If it doesn’t, taking further action becomes necessary.
3. Contacting a Regulatory Agency
Your bad faith insurance attorney may decide that the next best step is to contact an external regulatory agency. In Texas, this is the Texas Department of Insurance (TDI). In Louisiana, it’s the Louisiana Department of Insurance (LDI).
Sometimes, these regulatory agencies will investigate the insurer’s conduct and take action if it has violated state laws.
4. Sending a Demand Letter and/or Lawsuit
If all else fails, you may need to take legal action. Your attorney may first send a demand letter to tell the insurer to pay you the compensation you’re owed.
From there, you and your attorney would draft a complaint to state or federal court that will explain the claim and the act of bad faith by your insurance provider. Then your claim can either be settled before trial or at trial.
Dealing With an Unethical Insurer?
Need an attorney for your bad faith insurance claim in Texas? The skilled lawyers at Brasher Law Firm, PLLC, are always prepared to take their cases to court if necessary. Contact our bad faith insurance lawyers today!