An insurance bad faith claim is a claim that an insurer mishandled a policyholder's claim, for example by denying it without a reasonable investigation or refusing to settle once its liability was reasonably clear. Texas law lets a business recover the benefits wrongly withheld and, depending on the claim, interest, attorney's fees and additional damages.
We represent businesses, not insurers. Many of these disputes are resolved before trial through negotiation, appraisal or mediation.
Hail, wind, fire and water damage to buildings, equipment and inventory.
Lost income and extra expense after a covered loss interrupts operations.
Whether an insurer must defend, or pay, a lawsuit against the business.
Claims stalled past statutory deadlines or denied without a reasonable investigation.
Texas law bars conduct such as misrepresenting policy terms or refusing to pay without a reasonable investigation. A business can recover actual damages and attorney's fees, and additional damages if the insurer acted knowingly.
An insurer that misses the claim-handling deadlines on a claim it owes can owe attorney's fees and interest at a rate set by statute.
Claims for property damage caused by hail, wind, flood or another force of nature follow added rules. They require presuit notice, use a different late-payment interest rate, and reduce attorney's fees when the judgment is well below the amount demanded, eliminating them when it is far below. These rules don't apply to claims against the Texas Windstorm Insurance Association.
Unfair practices claims and weather claims both require written notice and a waiting period before suit, unless the time to sue is about to run out.
Unfair practices claims and breach of policy claims each have a limited time to sue, which depends on the claim. Many commercial policies set a shorter deadline for suing on the policy, though Texas law limits how short it can be.
Most commercial policies require prompt notice of a loss, steps to protect the property and, on request, a sworn proof of loss.
Our article on bad faith claims during storm season covers these rules and the court decisions behind them. See also business litigation.
We compare the policy, endorsements and denial letters with the facts of the loss.
The client's contractors, engineers and accountants help document the loss and its cost.
We send the written notice Texas law requires before suit.
When only the amount of the loss is disputed, appraisal under the policy may resolve it.
If the insurer still won't pay, we sue for the benefits, interest and fees the law allows.
Have a question that isn't answered here? Call us at (817) 631-8842 or send a message.
Ask a QuestionTexas prompt payment law generally gives an insurer deadlines to acknowledge a claim and start investigating, to accept or reject it after receiving the information it requested, and to pay once it accepts. The insurer can take longer to decide if it explains why it needs more time, and the deadlines run longer for surplus lines insurers and after a weather-related catastrophe.
Before suing over property damage caused by hail, wind, flood or another force of nature, a business must send the insurer written notice and wait a set period. The notice must describe the insurer's acts or omissions, the specific amount owed and the attorney's fees incurred so far. Without proper notice, the insurer can pause the case, and a notice missing the amount owed can cut off later fees.
Appraisal sets the amount of a loss through an appraiser for each side and an umpire, but it generally doesn't decide coverage. Timely payment of the award usually ends contract and bad faith claims seeking only policy benefits, and on a weather claim it can end the right to attorney's fees. Prompt-payment interest can still be owed if the insurer paid late.
Texas courts usually compare the policy with the lawsuit's allegations, without deciding whether they are true. If the allegations could fall within coverage, the insurer generally must defend, and a wrongful refusal can cost it prompt-payment interest on the defense costs.
With Texas storm season well underway, PKC Founding Partner and trial attorney Drew T. Peters breaks down how to spot bad faith insurance practices after hail, wind,…
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