Lawsuits Against a Texas Insurance Company
An insured party can bring a lawsuit against their insurance company for breach of contract, misrepresentation, nondisclosures, unfair settlement practices, or other misconduct. An insurance policy is a contract between an insured party and an insurance company. The policy spells out the obligations of both the insurer and the insured. When either party fails to fulfill their obligations under the policy, they are in breach of contract. When an insurance company does not fulfill their contractual obligations under the policy, the insured party can sue them.
An insured party seeking to recover damages under an insurance contract must be able to prove:
- The insurance contract existed and was in force at the time of the loss.
- The insured party complied with the terms of the insurance contract.
- The insurer has breached the terms of the insurance contract.
Under a breach of contract lawsuit, the insured may recover the policy benefits they are entitled to. The insured may also be entitled to recover foreseeable consequential damages that result from the insurer's breach of contract.
Misrepresentation & Nondisclosure Issues in Texas
At issue in many insurance lawsuits is the matter of misrepresentation. For example, when a claim is made under an insurance policy, the insured party may feel that the coverage provided by the insurance company is less than what was represented or promised to them by the insurance company or its agent at the time of sale. If an insurance company or its agent promises one thing and then fails or refuses to fulfill that promise, they can be held liable for breach of contract, negligence, fraud, unfair insurance practices, or deceptive trade practices.
Insurance companies must clearly and fully disclose any limitation or exclusions
an insurance policy may contain.
If they fail to adequately disclose such limitations or exclusions and then later use them as a reason for denying a claim, they may be liable for deceptive trade practices or unfair insurance practices.
Unfair Settlement Practices & Other Forms of Misconduct
Laws related to insurance settlement practices exist to protect insured parties from unfair or negligent practices of insurance companies. If an insurance company fails or refuses to pay benefits that are owed under the policy, if they pay them too slowly, or if they fail to act promptly to settle, they may be in violation of laws that exist to protect consumers. Similarly, if an insurer's adjusters fail to adequately investigate a claim and pay too little as a result, then they have done a disservice to their customer, and they can be held legally liable for it in an insurance lawsuit.
There are other ways that an insurance company may violate the law or cause harm to customers. If an insurance company unreasonably terminates an insurance policy, unfairly discriminates against customers, or commits other unconscionable acts, they may be liable for their actions.
If an insurance company has injured you through negligence, unfair or deceptive practices, or unlawful discrimination, you may be entitled to compensation for your loss, including compensation for damages over and above the insurer's obligations under your policy. Compensation that can be claimed varies according to the nature of the claim and lawsuit but can include (depending on the circumstances) all benefits owed under the insurance policy, economic damages, compensation for mental anguish, attorney's fees, and any other relief the court deems proper. At Arnold & Itkin LLP, a Houston business litigation attorney can help you recover these compensable damages.
Contact a Houston insurance lawyer today for more information. Call us at (888) 493-1629.
Insurance Lawsuit FAQ
When Can I Sue My Insurance Company?
It’s possible to sue an insurance company after they’ve committed something that is referred to as acting in bad faith. An insurance company is acting in bad faith when they do things like deny valid claims, misrepresent policies, and more.
Are Insurance Companies Required to Act Quickly?
Yes, insurance companies are required by the law to respond to claims within a reasonable amount of time. In Texas, a company has 15 days to acknowledge a new claim.
Why Is My Claim Being Delayed or Denied?
Insurance companies are businesses that want profits. Often, they’ll delay or deny a claim to protect their profits as much as possible. For example, an insurance company might repeatedly delay paying out a claim because they know that the claimant needs it. Then, they’ll offer a low settlement with the hopes that a person will accept it out of desperation. Sometimes, insurance companies will outright deny claims they know are valid hoping that the claimant will accept the denial. If your company is delaying or denying your claim, you need help from an insurance claim lawyer.