Bad Faith Insurance Practices
When a policyholder files an insurance claim, the insurer owes the policyholder a special duty to honor their policy and act in good faith. The insurer's special duty is a contractual obligation that is created when the policy is paid for and the policy is issued. If the insurance company neglects or intentionally violates their contractual duty to the policyholder, they may have acted in bad faith. In the state of Texas, the policyholder has the right to bring a lawsuit for not only breach of contract, but also violation of the Texas Insurance Code which includes the payment of special damages to the policyholder plus attorneys fees. Insurer Responsibility Under the Texas Insurance Code, the insurer must take care of claims promptly, with reasonableness, and in good faith. The clock starts to run when a claim is received and the insurer has fifteen day from receipt of the claim to do all of the following:
- Acknowledge the receipt of the claim;
- Promptly investigate the claim;
- Provide the policyholder written notice within fifteen days regarding the status of the claim and whether it has been accepted or rejected - whether in whole or in part;
- Request any additional documents or information if needed to fully investigate the claim; and
- Pay the claim, or any undisputed portion thereof, promptly.
Sometimes, the insurer is not able to accept or reject a claim within the fifteen day period. Under the Texas Insurance Code, the insurer has the right to ask for an additional forty-five day extension to investigate the claim as long as the request is reasonable and legitimate. They can't use this extension just to delay payment – they must have a legitimate reason. To do this, the insurer must send the policyholder a written notice asking for the delay and providing a reasonable explanation. Then they must accept or reject the claim within that forty-five day period. During the forty-five day period, the insurer must:
- Keep the policyholder informed of the status of the claim;
- Accept or reject the claim in writing;
- If the claim is rejected, the insurer must state the reasons for the denial in writing;
- Pay the accepted claim (whether in whole or in part) within five business days of agreeing to pay the claim; or
- If the payment is made on a conditional basis, such as the policyholder must provide certain documents, then the payment of the claim is due within five days of performance by the policyholder.
What to Do If Your Insurer Won't Pay When the insurer delays or denies payment on a legitimate claim, they have violated their legal duty to act in good faith. Under the Texas Insurance Code, the insurer must act in good faith and deal fairly with their policyholders, but what happens if they don't? And where do you turn for help? You can call the attorneys at Zinda Law Group. We deal with insurers every day and we have the experience and expertise to negotiate with your insurer and get your claim paid. And if they won't deal, we aren't afraid to take them to court. So call today at (800) 863-5312 for a free, no fee consultation and let us help you.
Where Zinda Law Group Practices:
As we’ve grown we expanded out west to El Paso, Texas subsequently into Arizona adding Tucson Personal Injury Lawyers to the firm, as well as adding offices in Colorado including Denver Personal Injury Lawyers and the surrounding cities such as Colorado Springs.
Types of Cases We Handle:
We also have a team of attorneys that have experience serious injury cases such as car accidents, wrongful death and truck accidents. We also have experience handling more complex cases such as gas explosions and drug injury cases, such as the Taxotere® Lawsuits.