Insured people can submit insurance claims after suffering losses, some catastrophic, such as fire damage to a home. Without having a legal obligation, insurance companies could delay or withhold payouts to vulnerable policyholders.
The state supreme court ruled that insurers owe a legal duty to the insured “of good faith and fair dealing.” This ruling gives insurers the right to scrutinize claims, creating unequal bargaining power between the parties.
Statutory protections against bad faith practices are found in Chapter 541 of the Texas Insurance Code (“TIC”). Under this law, insurers are prohibited from certain unfair and deceptive conduct.
When you have submitted a property damage claim and do not believe your insurer has handled it well, lawyers at Kirk Law Firm, PLLC, can review your case to discern whether bad faith practices played a role.
Consequences of Bad Faith Practices
When an insurer does not hold up their end of the bargain, homeowners are left feeling frustrated and helpless. In some cases, an insurance company’s slow response to, or denial of, a claim can put owners in a tough situation.
For instance, delay and denial of property damage claims can result in an insured person paying astronomical out-of-pocket costs or living in squalor. This adds stress to the already overburdened owner whose property is damaged.
The same bad faith practices can worsen conditions in an owner’s home or business following weather, fire, or water damage. Property owners who are waiting for or denied a payout are strapped with an individual financial burden. Their family or employees could also be impacted when the insured property is uninhabitable.
Bringing a Bad Faith Insurance Claim
Under common law, property owners can sue their insurer for breaching the implied covenant of good faith and fair dealing. However, this only applies in cases where claims are denied or underpaid. The insured person must prove the insurance company knew or should have known there was no reasonable basis for their denial or underpayment.
These hurdles make lawsuits alleging an insurer’s violation of TIC Chapter 541 more attractive to injured policyholders. Subchapter B. defines a wide range of improper methods and practices, any of which can give homeowners the right to sue for damages based on an insurer’s bad faith conduct. In certain cases, the policyholder can recover up to three times their actual damages.
Ask an Experienced Lawyer About Property Damage Claims Involving Bad Faith Insurance Practices
Our attorneys understand insurance law and the impact of bad-faith practices on property damage insurance claims. Policyholders can recover compensation for property damage, but the process is complex. Having knowledgeable legal counsel on your side could help you get the money you are owed.
You have a right to benefit from your insurance. Contact Kirk Law Firm, PLLC, for a free consultation when you suspect your insurer has acted in bad faith.
