When an insurance company fails to honor its obligations and acts in bad faith, the consequences can be devastating, leaving you feeling betrayed and helpless. You trusted the insurer to protect your interests. Yet, instead, you are left dealing with delays, denials, or unfair practices that only add to the stress of an already challenging situation. Whether you’re recovering from an injury, facing financial hardship, or grieving a loss, the last thing you need is to fight with the very company you paid to provide security. Understanding what constitutes bad faith insurance practices and knowing your rights is the first step in taking back control and seeking the justice you deserve.


At Byrd Davis Alden & Henrichson LLP, we’ve built a reputation as Austin’s oldest personal injury law firm, trusted since 1959. Our track record includes successfully handling complex cases, including insurance disputes involving bad faith practices. Recognized among the Best Law Firms in the U.S. by U.S. News & World Report, we are committed to helping you navigate challenging insurance claims with clarity and confidence.

What Constitutes Bad Faith Insurance?

According to Texas laws, bad faith insurance practices include an insurance company’s unreasonable claim denials, unfair delays, misrepresentations, failure to conduct an adequate investigation, or any other tactics to withhold money from those owed compensation. 

Whether the insurance company is responsible for paying their direct policyholder or another party,  these actions are taken with the intent to raise and maintain profits. These actions are illegal, and you have the right to take legal action against those who have committed bad faith practices.

If you choose to take legal action, we encourage you to retain a bad faith insurance lawyer from Byrd Davis Alden & Henrichson LLP. We have the skills and resources needed to hold insurance companies accountable and to pursue the best possible outcome for your case. 

If you suspect your insurer is acting in bad faith, don’t hesitate to reach out to us. We may be able to help you navigate this challenging situation and secure the compensation you are entitled to. Contact us today to discuss your case.

What Compensation Can You Recover in a Bad Faith Insurance Claim?

You may be able to win compensation for numerous damages in your bad faith insurance claim. The law recognizes that receiving unfair compensation is unacceptable for victims or policyholders. Under Texas law, you may be eligible to win compensation for the following damages:

  • Medical expenses
  • Lost wages
  • Property damage
  • Repair costs
  • Reduction in wage-earning capacity
  • Wrongful death
  • Emotional distress
  • Pain and suffering
  • Loss of enjoyment of life
  • Court and attorney fees

Other economic and non-economic losses may qualify for greater compensation, so we encourage you to work with a bad faith insurance attorney. When you retain a bad faith insurance lawyer from Byrd Davis Alden & Henrichson LLP, you can gain assistance identifying other losses that qualify for compensation, get estimates of the value of your claim, and maximize your potential financial recovery. 

Understanding Bad Faith Insurance in Texas: What It Is and How It Affects You

When you pay for an insurance policy, whether for your car, home, or health, you expect your insurer to honor the agreement and pay claims fairly. Unfortunately, sometimes insurance companies don’t live up to their end of the bargain. This is where the term “bad faith insurance” comes into play. In Texas, bad faith refers to an insurer’s failure to fulfill its obligations to its policyholders, either by refusing to pay legitimate claims, delaying payments unnecessarily, or providing inadequate responses to claims.

What Does Bad Faith Insurance Mean?

In simple terms, bad faith occurs when an insurance company acts dishonestly or unfairly in handling a claim. Insurance companies are legally required to act in good faith and deal with claims fairly. They should investigate claims promptly, provide clear communication, and offer settlements that are justifiable based on the policy terms. If the insurer does not do this and engages in deceptive practices or delays, it may be guilty of bad faith.

Common Examples of Bad Faith Insurance in Texas

Some of the most common bad faith insurance practices include:

 

  • Unnecessary Delays in Claim Processing: Deliberately dragging out the process without reasonable explanation.
  • Refusal to Pay Claims: Rejecting a legitimate claim without just cause or clear explanation.
  • Underpayment: Offering less than what is owed under the policy terms.
  • Misrepresentation: Providing false or misleading information about coverage, policy details, or claims procedures.
  • Failing to Communicate: Ignoring or delaying responses to the insured or their legal representation.

 

These actions breach the contractual agreement and can leave policyholders facing financial hardship when they most need support.

Legal Protections Against Bad Faith Insurance in Texas

Texas law offers protections for consumers who are victims of bad faith insurance. If you believe your insurer is acting in bad faith, you may be able to file a lawsuit against the company. The Texas Department of Insurance also has procedures to investigate complaints and enforce regulations ensuring policyholders’ fair treatment.

 

Moreover, Texas law allows policyholders to pursue additional damages beyond the original claim. If bad faith is proven, the court may award compensatory damages and, in some cases, even punitive damages to penalize the insurance company for its unethical behavior.

How a Lawyer Can Help With a Bad Faith Insurance Claim

Dealing with a bad faith insurance claim can be overwhelming, especially when you’re already coping with the physical, emotional, and financial impact of an injury or loss. Insurance companies are legally required to act in good faith, but when they fail to do so, a skilled attorney can be your best ally in navigating the complexities of the claim and holding the insurer accountable.

Understanding the Role of an Attorney

An attorney specializing in bad faith insurance claims can help in several key ways:

  • Investigating Your Claim: A lawyer will thoroughly review your policy, communication with the insurer, and all other documentation to determine if the insurance company is acting unfairly.
  • Negotiating with the Insurer: Lawyers have experience negotiating with insurance companies to ensure you receive the compensation you’re entitled to. If necessary, they can push the insurer to settle or proceed to court.
  • Filing a Lawsuit: If the insurer refuses to settle, an attorney will file a lawsuit on your behalf, advocating for punitive damages and other compensation that may be available under Texas law.

Byrd Davis Alden & Henrichson LLP, with over 65 years of experience, has built a strong reputation for handling complex personal injury cases, including bad faith insurance claims. Our experienced team has successfully represented injured Texans in a variety of situations, ensuring justice is served even in the most challenging cases.

We understand the toll dealing with an uncooperative insurer can take, and we are committed to helping you get the compensation you deserve. Whether it’s through negotiation or litigation, Byrd Davis Alden & Henrichson LLP is here to fight for you.

Why Choose Byrd Davis Alden & Henrichson LLP for Bad Faith Insurance Claims?

Insurance disputes involving bad faith can feel like an uphill battle, especially when you’re already facing the aftermath of a loss, injury, or financial hardship. At Byrd Davis Alden & Henrichson LLP, we’ve earned the trust of clients across Texas for over 65 years. As Austin’s oldest personal injury law firm, we’ve built a reputation for handling complex cases, including those involving dishonest insurance practices.

Our proven track record, combined with our recognition as one of the Best Law Firms in the U.S. by U.S. News & World Report, means we are equipped to help you hold your insurer accountable. We’ll work with you to pursue the compensation you deserve while making the process as clear and manageable as possible. Contact us today at (512) 454-3751 or through our contact form.