Wrongful Denial of Insurance Claims
When people file an insurance claim, they expect the insurance company to pay in a fair and prompt manner. When they don’t, you may have cause to hold them accountable, and an experienced lawyer can help.
Under Texas law, insurance companies have a duty of good faith and fair dealing when processing claims. This means that they cannot refuse to compensate you for a claim that is covered under the policy. Despite the fact that insurers must have a legitimate reason to deny a policyholder’s claim, insurance companies routinely try to underpay on claims or look for any reason to deny coverage.
If an insurance company wrongfully denies your insurance claim, contact The Krist Law Firm, P.C. at 281-283-8500 to find out how we can help. Insurance issues can be complex. Our Houston injury attorneys can get you the compensation you deserve.
We offer free initial consultations and do not charge up-front fees, There’s no risk or obligation to discuss your issue. If an insurance company has acted in bad faith, we’ll let you know and explain your next steps.
First Party and Third Party Claims
When a policyholder files a claim with their own insurer, it is a first-party claim. A third-party claim is made by someone else against an insured.
With first-party claims, there is an insurance contract between the policyholder and the insurance company. Generally, there is no such contract in third party claims.
Unfair Settlement Practices & Wrongful Insurance Denials
Texas adopted a version of the Unfair Claim Settlement Practices Act (USCPA), and Texas Insurance Code Chapters 541 and 542 prohibit unfair or deceptive insurance business practices. This includes wrongful denials.
Specifically, under Section 541.060 of the Texas Insurance Code, insurance companies are prohibited from engaging in the following unfair settlement practices:
- Knowingly misrepresent to claimant a material fact or policy provision relating to coverage.
- Failure to attempt in good faith to effectuate a prompt, fair, and equitable settlement of a reasonably clear claim.
- Failure to promptly provide to a policyholder a reasonable explanation of a denial or offer of a compromise settlement.
- Refusal to pay a claim without conducting a reasonable investigation with respect to the claim.
Therefore, an insurer’s duty is to attempt in good faith to settle a claim that is covered by the policy and the insurer’s liability to the third party is reasonably clear.
Legal Help for Bad Faith Insurance
If an insurance company refuses to settle a claim in good faith when the liability is reasonably clear, you may be able to bring a claim for compensation against the insurance company for its wrongful denial.
Wrongfully denying or delaying payment of a claim without having a legitimate reason also constitutes a breach of the duty of good faith and fair dealing. This is what’s referred to as a bad faith insurance claim.
When an insurance company wrongfully denies your claim, it may be held liable for violations of the Texas Insurance Code, the Deceptive Trade Practices Act, breach of the underlying insurance contract, or a separate tort action for bad faith depending on whether it is a first or third-party claim.
How A Lawyer Can Help You
If you have been injured in an accident or some other accident and believe that your insurance claim has been wrongfully denied, contact The Krist Law Firm, P.C. to discuss your options. Our Houston personal injury attorneys can help you determine what coverage exists, negotiate with the insurance company on your behalf, and fight for the compensation you deserve.
We understand the tactics insurance companies use to deny legitimate claims and have a proven track record of securing the maximum compensation available for our clients.
Contact us today at 281-283-8500 or use our online form. We offer a free consultation and you won’t owe us anything unless you obtain compensation.