UNDERSTANDING THE BAD FAITH TACTICS OF INSURANCE COMPANIES
Jan. 21, 2022
When you file an insurance claim, you expect the insurance company to act in good faith and handle your claim fairly. However, it is not uncommon for insurance companies to use bad faith tactics when responding to, investigating, and handling claims.
Bad faith tactics are illegal. If you suspect that the insurance company is engaging in unfair or dishonest tactics, you can hold the insurer accountable for violating the law. Contact The Law Office of Steve Brannan to speak with a knowledgeable personal injury attorney who can help you gather evidence to prove that an insurance company acted in bad faith. We also serve clients throughout communities in West Texas, including Pecos, Big Spring, Andrews, and Midland.
Bad Faith Tactics Insurance Companies Use
Bad faith tactics refer to dishonest or unfair dealing. These tactics encompass a variety of practices employed by insurance companies in an attempt to increase their own profits at the expense of policyholders and claimants. When dealing with an insurance company, watch out for the following bad faith tactics:
1. Making a Lowball Settlement Offer
One of the most common bad faith tactics of insurance companies is to make lowball settlement offers. The practice is also known as “lowballing.” It means offering less money than the claim is actually worth.
Consider speaking with an experienced attorney before accepting the insurance company’s offer. You need to calculate your past losses and estimate your future damages and cumulative expenses before you settle. Often, a claimant needs to wait until they reach their Maximum Medical Improvement (MMI) before settling a personal injury claim.
2. Long Delays
Another common bad faith tactic employed by insurance companies is delaying the claims process or the payment of a valid claim. An insurer may also fail to respond to communications within a reasonable amount of time. Those delay tactics are an insurance company’s attempt to make claimants frustrated and give up pursuing the claim.
Most states impose time limits on accepting or denying an insurance claim. In Texas, the law requires insurance companies to accept or deny claims within 15 business days after the reception of the claim.
3. Failing to Conduct a Thorough Investigation
Every insurance company owes its policyholders and claimants a duty of good faith and fair dealing. An insurer’s failure to conduct a thorough and prompt investigation may constitute a breach of duty. An insurance company may wait an unreasonably long time to launch an investigation and evaluate the merit of the claim.
Since insurance policies contain ambiguous and complex language, it opens the door for insurance companies to deliberately misinterpret the terms of the policy in their favor. However, because insurance companies owe a duty of good faith and fair dealing, any misrepresentation of the policy’s coverage is illegal.
Texas Unfair Claims Settlement Practices Act
The Texas Unfair Claims Settlement Practices Act protects the rights of policyholders and makes it illegal for insurance companies to engage in any practices that violate the Act, including:
Deliberately and knowingly misrepresenting policy provisions or material facts
Failing to conduct a thorough and prompt investigation
Denying a claim without an investigation
Failing to provide a reasonable explanation for the denial of a claim
Offering substantially less than what a claim is worth
At The Law Office of Steve Brannan, we have represented clients dealing with different types of bad faith practices in Odessa, Texas. We are dedicated to obtaining justice for our clients and aggressively representing our clients’ rights in insurance bad faith cases.
Your Attorney’s Role in Settlement
If you are dealing with the bad faith tactics of an insurance company, consider contacting an experienced attorney to address your particular issues. Sometimes, determining whether an insurance company acted illegally is challenging, which is why the assistance of a skilled attorney may be necessary to assess your situation.
Having an attorney on your side can help you ensure that your personal injury claim is handled correctly and fairly. If your attorney can find evidence of insurance bad faith practices, they can help you file a lawsuit against the insurer and secure a favorable outcome in your case.
Reach out to The Law Office of Steve Brannan to discuss your legal options and start fighting for the compensation to which you are entitled.