Damage to your home from a storm is traumatic enough. One day your lovely castle that you’ve worked so hard to pay for is looking great and protecting you from the elements… then a storm hits and the next day you’ve got damage to deal with. Maybe a hurricane tore the roof off, or maybe there’s more subtle damage – like hail damage lowering the life of the roof. When you file an insurance claim, it’s not supposed to get worse, but it can—and does.
Many insurance companies engage in questionable and bad faith claims practices to minimize the amount they have to pay out. Although the Texas Unfair Claim Settlement Practices Act is intended to prevent them from doing so, the problem is that policyholders don’t always have a solid understanding of what is and is not covered in their insurance policies. Consequently, these people are taken advantage of and receive less of a payout than they are entitled to.
Let’s take a closer look at what your insurance company can and cannot do under the Act.
What Constitutes an Unfair Claim Practice?
The Texas Insurance Code requires insurance companies underwriting any type of policy in the state (e.g. automobile, health, disability, life, homeowners) to meet certain standards of conduct. The Texas Unfair Claim Settlement Practices Act (Insurance Code §§542.001-542.302) legally prohibits insurers from any of the following claims practices:
- Intentionally misleading you regarding policy provisions or material facts related to your coverage. For example, your insurance company cannot enforce a provision that was altered without your knowledge or consent.
- Refusing to pay a claim without carrying out a reasonable investigation first
- Failing to carry out an investigation within a timeframe that is reasonable under the circumstances. In Texas, your auto insurer is generally required to acknowledge your claim and commence an investigation within within 15 days of you filing your claim.
- Delaying your claim without an acceptable reason. All insurers must provide you with notice and a reasonable explanation of any delays.
- Failing to properly explain their denial of a claim or offer a reasonable compromise settlement.
- Failing to attempt a good faith settlement of a reasonable claim once their liability has become clear.
- Offering considerably less than the amount due.
- Trying to compel a complete and final release of a claim after the policyholder has only received a partial payment
- Offering less than what the policyholder received in an original lawsuit, compelling the latter to file another lawsuit to recover the amount due. Responding to your payment requests with “So sue us” is legally not an option.
Many policyholders who have either had their claim unfairly denied or been offered a subpar settlement may feel helpless in the face of the insurer’s comparatively greater resources, and accept what they are offered because they believe they have no choice. Don’t make that mistake.
In Texas, if you have been victimized by delayed, denied, or underpaid insurance practices, you have consumer-friendly legal options available to you, including suing the insurance company. In certain instances, state law even allows you to collect punitive damages and legal fees in addition to any outstanding amounts owed under your insurance policy.
For assistance in asserting your rights and obtaining the payment you deserve, contact the Von Dohlen Law Firm today.