What Are Some Prohibited Insurance Company Practices?
Due to the high volume of claims filed by homeowners and businesses throughout the Gulf Coast in recent years due to hurricanes and tropical storms, insurance companies have turned to unethical and illegal insurance practices, commonly known as bad-faith insurance practices.
Bad faith insurance practices include, but are not limited to, the following:
- Denying a policyholder's claim despite overwhelming evidence to support it
- Conducting no investigation of a claim or, in some cases, denying the claim without providing any reason for the decision
- Delaying payment unreasonably
- Making a partial payment and seeking a settlement for the remainder
- Unreasonably making demands for documents, interviews, and other information in a bid to delay or deny making payments.
Insurance companies may be purposefully misrepresenting the facts of a certain claim or twisting policy provisions to avoid covering the full amount that is due. They sometimes may simply refuse to hold an investigation and then claim that there is not enough evidence to support insurance payment. Even when policyholders gather all the evidence they can and file the claim quickly, insurance companies might still withhold payment. In this case, you need to seek legal representation from a professional experienced in insurance company practices.
Each state has its own standard for regulating insurance companies, which in turn tends to favor the insurance industry. With this type of favoring, insurance companies may be more inclined to practice bad-faith claims. Fortunately, Texas law and the laws of states across the Gulf Coast states provide remedies when insurance companies engage in this type of banned business conduct.