Houston Bad Faith Insurance Claims Lawyer

What is a Bad Faith Insurance Claim?

Insurance companies have a general responsibility to use fair, good faith settlement practices. A bad faith insurance claim arises when an insurance company fails to fulfill its obligations to its policyholder as set forth by the terms of the policy. In other words, bad faith claims are essentially about an insurer’s intentional disregard of their obligations under the contract. There are two broad categories of bad faith insurance claims in Texas: 

• First Party Bad Faith Insurance Claims: A first party bad faith insurance claim occurs when an insurance company improperly handles a claim submitted by its own policyholder.  
• Third Party Bad Faith Insurance Claims: A third party bad faith insurance claim involves an insurer’s failure to defend/settle a claim within the policy limits on behalf of the insured. 

Know the Law: Bad Faith Insurance Claims in Texas

Texas has bad faith insurance laws to protect policyholders and others from unfair practices by insurance companies. In Texas, an insurer acts in “bad faith” if it fails to attempt in good faith to reach a prompt, fair, and equitable settlement of a claim once liability becomes reasonably clear. Bad faith can also include the unreasonable denial, delay, or underpayment of a valid claim. A bad faith insurance claim may be brought under the common law in Texas or under the state’s bad faith statute (Texas Insurance Code Sec. 541.060). The law lists the following three things as examples of a bad faith insurance practice: 

1. The failure to make a good faith attempt to reach a timely, fair settlement of an insurance claim after liability has become clear; 
2. The refusal to pay a claim without first conduct a comprehensive, reasonable investigation of the circumstances; and
3. The intentional or negligent misrepresentation of material facts related to the case or any relevant policy provisions. 

Compensation for a Bad Faith Insurance Claim in Texas

Were you the victim of a bad faith insurance practice in Houston or elsewhere in Southeast Texas? You have the right to pursue compensation for the full scope of your damages through a bad faith insurance claim. A successful bad faith insurance claim may include compensation for: 

• Value of Initial Claim: The foundation of a bad faith insurance claim in Texas is the value of the underlying policy claim that the insurer should have paid. Indeed, it is this amount that represents the benefits that would have been owed if the insurer had acted in good faith. Through a successful bad faith claim, you can recover the full value of the original claim. It is crucial that the underlying claim is comprehensively documented. 
• Additional Costs: Beyond the value of the initial claim, an insured may also recover costs directly attributable to the insurer’s bad faith, such as expenses incurred while handling or investigating the issue. These might include the cost of securing alternative coverage, out-of-pocket losses, and other related damages that would not have arisen if the insurer had paid the claim in a timely manner. 
• Attorneys’ Legal Fees: Texas statutes allow a prevailing plaintiff in a bad faith insurance claim to recover reasonable and necessary attorneys’ fees in certain bad faith claims. In other words, our state has a fee-shifting rule for bad faith insurance claims. Though, fee-shifting is discretionary by the court. 
• Exemplary Damages: While not awarded in every bad faith insurance claim, Texas allows the award of exemplary damages. Also known as punitive damages, exemplary damages are essentially a form of penalty damages. Texas courts may award these damages when the insurer’s actions were committed knowingly or with reckless disregard for the policyholder’s rights. 

Note: Texas follows the Stowers doctrine. Under the legal doctrine, an insurer that fails to accept a reasonable settlement demand within policy limits when liability is clear may be liable for the full amount of a subsequent judgment, even if it exceeds policy limits.

Why Trust the Houston Bad Faith Insurance Lawyers at The Stano Law Firm

Bad faith insurance claims are complicated. Insurers must use good faith settlement practices—but, unfortunately, far too many of them fail to do so. Whether you are bringing a first party bad faith claim or a third party bad faith claim, it is imperative that you have strong and experienced legal representation. Our founder and lead attorney Matthew C. Stano is a strong and aggressive advocate for justice. With millions of dollars recovered for clients, we have the case results that you can trust. When you contact us at our Houston office, you will have an opportunity to consult with a Texas bad faith insurance lawyer who can: 

• Conduct a comprehensive, confidential review of your bad faith insurance case;
• Investigate your bad faith insurance denial—gathering all relevant evidence; 
• Handle your insurance claim and represent you in any settlement talks; and
• Take aggressive action to help you get the maximum bad faith damages. 

Contact Our Houston Bad Faith Insurance Attorney Today

At The Stano Law Firm, our Houston bad faith insurance lawyer has the skills, knowledge, and expertise to hold large insurance companies accountable. Bad faith denials are not an acceptable practice. If you or your loved one had an insurance claim denied in bad faith, please do not hesitate to contact us today for a free, completely confidential consultation. With an office in Houston, we handle bad faith insurance claims in Harris County and throughout Southeast Texas.