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Texas Trial Lawyers

How does the Consumer Bill of Rights apply to insurance?

On Behalf of | Jul 14, 2020 | Uncategorized

In a state as populous as Texas, it is unsurprising people purchase multiple insurance policies. Auto, home, business, boat, and health represent a small number of coverage types. The process involved seems straightforward. Someone buys a policy, and the insurance company assumes the risk to pay out legitimate claims.

What happens when an insurance company never intended to honor the deal? Such an instance would be a case of “bad faith.” Thankfully, the Lone Star State has a Bill of Rights for auto insurance purchasers.

The Bill of Rights provides auto insurance consumers with a summary of their rights under state statute. However, the Bill of Rights does not supersede the insured responsibilities noted in a policy. Policyholders should read their insurance contracts to know their responsibilities and terms. For example, if a policy explicitly excludes commercial use, the insured would likely not be covered when engaged in rideshare work.

Under the Bill of Rights, consumers can call the Texas Department of Insurance to procure information about an insurance company. Perhaps the insured has questions about the company’s financial health or license. The state’s toll-free number could answer questions regarding these and other matters. The Bill of Rights also requires insurance companies to answer customer inquiries, as well.

The law also bans insurers from making false statements. False or deceptive statements could potentially create a case for a bad faith insurance claim.

Rules also exist regarding payment plans, excess limits, credit history, privacy rights, cancellations, and other areas. The law establishes that the insured can sue if an insurance company violates any rights.

If an insurance company violates state law, the insured may have a civil case. An established attorney who handles insurance litigation can represent a client in court to seek compensation for denied claims and more.