When your insurance company denies a legitimate claim or delays payment without a valid reason, you may be facing bad faith insurance practices. In Texas, insurers have a legal obligation to handle claims fairly and investigate them thoroughly, yet many policyholders find themselves fighting the very companies they trusted to protect them.
At Byrd Davis Alden & Henrichson, LLP, we understand how frustrating and financially devastating bad faith insurance practices can be, especially when they accompany serious personal injuries. Our experienced attorneys have been helping Texans navigate complex insurance disputes for over 65 years, ensuring our clients receive the compensation they deserve from insurance companies that fail to honor their obligations.
What Constitutes Bad Faith Insurance in Texas
Bad faith insurance occurs when an insurance company violates its duty of good faith and fair dealing toward a policyholder. In Texas, insurers must act reasonably and promptly when investigating, evaluating, and settling claims. The Texas Insurance Code requires insurance companies to acknowledge receipt of claims, investigate them within reasonable timeframes, and provide clear explanations for claim denials. When you’re dealing with personal injury cases, the stakes become even higher as medical bills mount and lost wages create additional financial pressure.
Insurance companies may engage in bad faith practices through several methods. They might deny claims without conducting proper investigations, delay payments unreasonably, or offer settlements far below what claims are actually worth. Some insurers request excessive documentation repeatedly, creating unnecessary delays in the claims process. Others misrepresent policy terms or coverage limits to avoid paying legitimate claims.
For example, if you’re injured in a car accident and your insurance company denies coverage for medical expenses despite clear policy language covering such costs, this could constitute bad faith. Similarly, if an insurer takes months to investigate a straightforward claim without justification, they may be acting in bad faith.
How Texas Law Protects Policyholders
Texas law provides several protections for policyholders facing bad faith insurance practices. The Texas Deceptive Trade Practices Act allows consumers to seek damages when insurance companies engage in deceptive or unfair practices. Additionally, the Prompt Payment of Claims Act requires insurers to acknowledge claims within 15 days and complete investigations within specific timeframes, typically 15 to 30 days, depending on the complexity of the claim.
Under Texas law, successful bad faith insurance claims may result in actual damages, additional damages, and, in some cases, attorney’s fees. Actual damages include the amount the insurance company should have paid plus any consequential damages you suffered due to the wrongful denial or delay. The court may also award additional damages up to 25% of the claim amount plus $1,000, and in cases involving punitive damages, the amount can be significantly higher.
Building a Strong Bad Faith Insurance Case
Successfully proving bad faith requires demonstrating that your insurance company breached its duty of good faith and fair dealing. This involves showing that the insurer failed to follow proper procedures, acted unreasonably, or violated Texas insurance regulations. Documentation plays a crucial role in these cases, including all correspondence with your insurance company, claim forms, medical records, and evidence supporting your original claim.
The key elements of a bad faith claim include proving you had a valid insurance policy, that you suffered a covered loss, that you complied with policy requirements, and that the insurance company breached its duty through unreasonable conduct. For personal injury cases specifically, we must also demonstrate how the insurance company’s bad faith actions caused additional harm beyond the original injury.
When building your case, we gather evidence of the insurance company’s investigative process, review their internal communications, and analyze whether their actions met industry standards. We also examine whether the insurer properly communicated with you throughout the claims process and whether they provided adequate explanations for their decisions. Understanding how insurance adjusters operate can be crucial in identifying bad faith practices.
Why Choose Byrd Davis Alden & Henrichson, LLP for Your Bad Faith Insurance Claim
When facing bad faith insurance practices alongside serious personal injuries, you need attorneys with the experience and resources to take on major insurance companies. At Byrd Davis Alden & Henrichson, LLP, we have been Austin’s premier personal injury law firm since 1959, with a proven track record of handling complex insurance disputes and catastrophic injury cases.
Our firm has recovered over $100 million for clients throughout Texas, and our 98% success rate demonstrates our commitment to achieving favorable outcomes. We are true trial lawyers who aren’t afraid to take cases to court when insurance companies refuse to negotiate fairly. This reputation gives us significant leverage in settlement negotiations, as insurers know we have the experience and dedication to win at trial. Contact our experienced legal team to discuss how we can help you hold your insurance company accountable and secure the compensation you deserve for both your original claim and the additional damages caused by their bad faith conduct.
