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What can I do if my insurance company treats me unfairly?

On Behalf of | Dec 22, 2023 | Car Accidents |

Insurance companies have a legal obligation to deal with their policyholders in good faith.

Basically, this means insurance companies must do more than just honor the letter of their policies. They must also be fair to their customers.

They may not take advantage of their superior financial and legal resources to force their own policyholder to give up on a claim or accept much less than what their claim is worth.

To be clear, the duty of good faith in Texas only applies to the policyholder. To give a common example, insurance carriers owe no duty of good faith to an accident victim if their policyholder was negligent.

Questions about whether an insurance company acted in good faith may be more common in situations involving life insurance or health insurance.

However, the question of good faith may also come up during a motor vehicle accident case. For example, if a policyholder got hurt by an uninsured motorist, they may seek out uninsured motorist benefits from their own insurance company.

If an insurance company acts in bad faith, their policyholder may file suit for compensation. The compensation they receive may go beyond what they would have received from their claim and may even be higher than their policy limits.

When should I wonder if my insurance company has dealt with me in bad faith?

Not every disagreement between an insurance company and their customer is a matter of bad faith. Insurance companies may, for example, deny claims, but only after a thorough investigation and only if they can show how their policy does not cover the claim.

A policyholder has a claim denied or partially denied should question whether the insurance company has acted in good faith, especially if the reason for denying the claim is hard to understand or does not make sense.

Likewise, unexplained delays, asking unnecessary for information or other common stalling tactics may be a case of bad faith.

Those who are struggling to get their insurance company to pay a claim may evaluate whether they have a valid case for insurance bad faith.