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What is insurance bad faith?

On Behalf of | Nov 27, 2023 | Bad Faith Insurance

If a Texas insurance company fails to honor its commitment to a client, it is likely acting in bad faith. There are several acts that may constitute bad faith such as failing to investigate a claim in a timely manner or not being transparent about exclusions contained in the policy. A bad faith incident can occur whether you’re dealing with home, auto or any other type of insurance company.

It might not be bad faith

If your insurance company makes an offer you’re not happy with, it doesn’t necessarily mean it was made in bad faith. The same is true if it takes longer than you’d like to come to a settlement or for an investigation to conclude because of issues with computer or other systems. Finally, if a delay is related to an employee error, your bad faith claim may be dismissed or otherwise denied.

Protecting yourself against bad faith

You can take several steps to protect yourself against insurance bad faith incidents. For example, you are encouraged to make your initial claim in writing and keep records of all interactions that you have with your insurance agent. Furthermore, you are encouraged to review your policy carefully before making a claim to ensure that you aren’t subject to exclusions, waiting periods or other clauses that protect your insurance provider.

If you believe that you’re the victim of a bad faith insurance scheme, you have the right to take legal action against your insurance company. Assuming your claim is successful, you may be entitled to any amounts owed under the terms of your policy. In addition, you may receive compensation for the cost of pursuing legal action as well as expenses incurred to repair a car or fix your house while waiting for a claim to be paid.