The law provides that Texas insurance companies owe several duties to their policyholders. These procedural and substantive rules aim to ensure that insurance companies settle claims fairly and promptly. Insurance companies that fail to abide by these standards may be liable under Texas’ insurance bad faith and breach of contract laws.
While insurance companies are subject to significant oversight, many companies continue to engage in questionable practices that can adversely affect policyholders. Insurance companies typically maintain a team of experienced attorneys to defend their practices, which often leaves policyholders in a daunting and precarious financial position. Policyholders who face difficulties settling a claim with their Texas insurance company should contact an attorney to discuss their rights and remedies.
Under Texas law, policyholders pursuing a common law bad faith claim must establish their insurance company improperly denied a lawful claim. These causes of action usually stem from misrepresenting a policy, failing to settle in good faith, failing to explain a denial, failing to clarify coverage, and refusing to settle a claim without a reasonable investigation. The most common insurance business practices that lead to these claims are, claim undervaluation, delaying claims or payments, canceling or changing terms of a contract, requesting unnecessary information, alleging fraud without justification.
For example, recently, the Texas Supreme Court heard petitions from an insurance company and insured, challenging a lower court’s ruling. In that case, the insurance company argued that it settled claims against its insured related to a car accident, but that the release was contingent on the insured’s agreement to pay a portion of the settlement. The insured complied and then brought a claim for reimbursement, arguing that the insurance company negligently failed to settle the claim and breached their contract.
The trial court denied the insurance company’s motion to dismiss. The appeals court granted relief to the breach of contract claim but found that the trial court’s negligent failure to settle the decision was proper. The Supreme Court found that the trial court abused its discretion in denying the company’s motion. However, the court also found that the appeals court erred in dismissing the insured’s claim for contract breach. This case highlights the complexity of Texas accident cases and the importance of retaining an experienced attorney.
Have You Suffered Injuries in a Texas Car Accident?
If you or someone you love has suffered injuries in a Texas car accident, contact the attorneys at Carabin Shaw for assistance. For nearly 30 years, our firm has advocated on behalf of injury victims in their claims stemming from Texas car accidents, defective products, premises liability, worksite accidents, and medical negligence. We understand how challenging these cases can be and work to ensure that our clients recover the damages they deserve. Our attorneys have successfully represented clients against negligent parties and their insurance companies. Damages and remedies in these cases often include payments for medical expenses, lost wages and benefits, pain and suffering, and more. Contact our office at 800-862-1260 to schedule a free initial consultation with one of our experienced Texas injury attorneys.