What To Do If You Think Your Insurance Company Acted In Bad Faith

If you insurance company is in any way intentionally acting in bad faith to avoid paying a legitimate claim, the company is opening itself up to potential punitive damages in the state of Texas. These punitive damages are there to provide you with additional compensation, as well as punish the insurance provider for unfair business practices. 

Some of the most common bad faith practices include but certainly aren’t limited to:

No Communication or Lack of Communication

When an insurance company avoids communicating with a customer after her or she files a claim, they may or may not be avoiding their legal responsibility to pay. Insurance providers that don’t acknowledge that they have received your claim or fail to move forward with an investigation may be acting in bad faith. 

You should be communicating with your insurance company fair frequently. They should be available to answer your questions and provide you with a timely decision in terms of your claim.

Denying an Insurance Claim Without Cause

Some insurance companies will act in bad faith by denying rightful coverage in hopes that you, as the claimant, will concede to the denial. But, if you are wrongfully denied insurance coverage, you have the right to challenge the decision. 

While insurance providers have the right to deny a claim, they also must provide you with valid reasons as to why they made that decision.

Delaying Payment on a Claim

If your insurance provider is using delay tactic to slow down the process, they are acting in bad faith. Another common tactic used by insurance companies is to make unreasonable demands in terms of documents and evidence. 

When an insurance company delays the process, this sets the consumer up to accept a lowball offer, since some money is better than no money when times are hard. Those who are in desperate need of the payout they’re rightfully owed are more likely to fall victim to this bad faith tactic. 

Pressuring a Claimant to Accept an Unfair Offer

Many, many insurance companies will pressure the claimant to accept an unfair settlement. Insurance companies acting in bad faith may hint at or downright lie that there isn’t another offer available. In some cases, they’ll play “good cop, bad cop”, stating that your policy technically doesn’t cover the expense, but that they will provide a low amount of coverage for your damages.

In this case, hiring an experienced Houston insurance claims lawyer who’s well-versed in insurance law will help to get you the amount you are actually owed, and in some cases, secure punitive damages on your behalf. 

Changing your Insurance Policy or Cancelling without Notice

If an insurance company changes your insurance policy in any way without your permission, they are acting in bad faith. 

Many times, this is an effort to minimize your compensation or deny your claim completely. They will base the eligibility of your claim off of the revised policy versus the policy that you agreed to. 

You should always keep a copy of your original insurance policy to ensure this doesn’t happen to you. And, if you believe your insurance provider may be guilty of this act, ask them for the original documentation. If you’re unsure of the validity of said document, bring this up in your free consultation.