May 17, 2018
If your insurance claim was denied, it may not be your fault. All too often, insurance companies act in bad faith and don’t pay for legitimate claims.
In this post, we’re going to tell you about the most common ways that insurance companies act in bad faith, and how to protect yourself against them.
What Is Bad Faith Insurance?
When you faithfully pay your premiums, you expect your insurance company to be there for you when you must file a claim. In most cases, that’s exactly how it works.
Unfortunately, sometimes insurance companies are more interested in protecting their bottom line than delivering on their promises to you. That’s when bad faith insurance can come into play.
Acting in good faith involves following through with what is promised in the policy. Acting in bad faith is violating an insured individual’s rights to receive insurance benefits.
Texas law protects you against bad faith insurance and says that insurers must adhere to the policy that they sold you. However, the law can be complicated. If you aren’t sure whether your policy has been violated, it’s wise to speak with a qualified attorney who can clearly explain how the law applies to your case.
Common Bad Faith Occurrences
These are the five most common ways bad faith practices occur.
- Failing to process claims in a reasonable amount of time
When you file a claim, it’s reasonable to expect your insurance company to respond in a timely manner. You should receive notices that your claim is being investigated and processed, and reports indicating the findings. If the claim is unreasonably delayed, you may be able to hold the insurance company liable for bad faith practices.
- Choosing evidence in a way that favors the insurance company
As a paying customer, you have the right to a fair, unbiased investigation into your claim. Unscrupulous insurers may use a specific adjuster or expert consultant to find the answers they want, whether they are based on the truth or not. For example, if you have five documents that say you should be approved for surgery, but the insurer chooses one report that says you should not be approved, this should raise a red flag for you.
- Using unreliable sources
You are entitled to the most accurate claim review. Some insurers will handpick their experts to ensure their position is defended. Perhaps they use a certain doctor’s report even though the doctor never sees you for an exam. This is an unreasonable practice that counts as acting in bad faith.
- Screening the investigation with bias
When you file a claim, you should expect that no one will look at it with an unfair bias. However, insurers who act in bad faith may view it through the lens of denial rather than approval. They may limit their view to see only reasons to exclude factors for approval. They may also limit their scope of investigation to only one aspect of the claim rather than the total claim. Acting in bad faith includes behavior that is biased against the insured’s best interest.
- Warning that the policy may be cancelled
The worst bad faith offenders will threaten to cancel the insurance policy when you attempt to file a claim. They may try to force you into accepting a lower payment than promised, or else your policy will be cancelled.
If your insurance company committed a violation in one or more of these areas, you may be able to file a lawsuit to help you recover your benefits. You also may be eligible for additional compensation due to punitive damages. Finally, you can recover your attorney fees and your costs for pursuing your claim.
Filing a Lawsuit against Your Texas Insurer
Fighting back against an unscrupulous insurer may sound good, but it is important to understand that lawsuits against insurance companies are often uphill battles in our state. Insurance companies will resist payouts with fervor and your fight may be long, difficult, and complicated.
If you are unsuccessful in receiving payment on a claim, you can file a complaint with the Texas commissioner for insurance, so an investigation can be conducted. However, if you have suffered losses, your best chance at success is to work with an experienced Texas bad faith attorney who has a winning track record in these types of cases.
About the Author:
Jeff Hampton has been practicing law in Texas in 2005, first in the Tarrant County District Attorney’s Office as a prosecutor, and now as a private attorney with the Hampton Eppes Law Group, protecting the rights of Texans who have suffered injury due to negligence or are facing criminal charges. His success in helping people with their legal troubles has been recognized by clients and peers alike, with a Top Attorney designation and 10/10 Superb Rating on Avvo, and a place on the National Trial Lawyers list of the Top 100 Trial Lawyers.