Insurance companies are supposed to provide injury victims with the compensation they need to get back on their feet. Unfortunately, this doesn’t always happen. Bad faith insurance claims occur when insurance companies do not uphold “good faith” - that is, they do not pay proper compensation that they are legally obligated to pay to policyholders or accident victims.
Here are some signs that the insurance company investigating your claim may be acting in bad faith.
Two Types of Bad Faith
There are two types of bad faith insurance claims. Depending on the situation and the state you are in, you may have to prove certain elements to have a successful outcome.
Common Law Bad Faith
An insurer has a common law duty to fairly pay claims according to the good faith process. In Texas, this duty is breached when:
There is an absence of a reasonable basis for denying or delaying payment of benefits under the policy; and
The carrier knew or should have known that there was not a reasonable basis for denying the claim or delaying the payment of the claim
Statutory Bad Faith
A policyholder may also bring a statutory bad faith claim against an insurer. These claims are based on laws that vary by state and protect the insured from unfair or deceptive practices that may be used by insurance companies. A policyholder in Texas can bring a separate claim against an insurance company if the company:
Misrepresented a material fact or policy provision related to coverage
Failed to attempt, in good faith, a prompt, fair and equitable settlement when coverage on a claim has been clear
Failed to provide an explanation of a denial
Failed to affirm or deny coverage, or submit a reservation of rights, within a reasonable time
Unreasonably delayed settlement on the basis that other coverage may be available
Failure to pay a claim without conducting a reasonable investigation
Signs of Bad Faith Insurance
While the presence of the following factors may not be a sure sign of a bad faith insurance claim, it may help establish a basis for a claim if the insurance company:
Misrepresented relevant facts or policy provisions
Failed to acknowledge a claim and act promptly after receiving a claim
Failed to reasonably investigate a claim
Failed to approve or deny a claim within a reasonable amount of time
Failed to provide reasonable explanation or reasons for denying a claim
The attorneys at the Law Offices of Vic Feazell are committed to helping you obtain the compensation you are entitled to receive. If you believe that an insurance company is acting in bad faith, we will investigate the matter and help ensure your rights are protected.
Contact our firm at (254) 938-6885 to schedule a free case review with one of our Waco personal injury attorneys.