After suffering an injury in an accident, you naturally expect insurance coverage to handle your medical expenses, lost wages, and property damage. Unfortunately, many policyholders and injured victims find themselves facing sudden claim denials, unexplained delays, or lowball settlement offers that don’t cover basic care.
Understanding how insurance claims work—and recognizing when an insurer crosses the line into insurance bad faith—is crucial to protecting your rights.
Common Tactics Used to Reduce or Deny Claims
Insurance companies operate as profit-driven businesses. Common tactics used to minimize payouts include:
- Shifting Fault: Arguing that you were primarily at fault for the accident to reduce or eliminate their financial exposure under Texas comparative fault laws.
- Disputing Medical Treatment: Claiming that your medical procedures were “unnecessary,” overpriced, or related to pre-existing conditions rather than the crash.
- Delayed Investigations: Deliberately stalling communications or delaying claim processing in the hope that financial strain forces you to accept a minimal offer.
- Quick, Lowball Settlements: Offering an immediate lump sum before the full extent of your injuries and long-term care needs are fully known.
What Is Insurance Bad Faith in Texas?
Under the Texas Insurance Code and common law, insurance companies owe policyholders a duty of good faith and fair dealing. Insurance bad faith occurs when an insurer acts dishonestly or unfairly regarding a claim. Examples of bad faith include:
- Denying a claim without conducting a reasonable investigation.
- Failing to attempt a fair settlement when liability is reasonably clear.
- Misrepresenting policy provisions or relevant legal facts.
- Failing to provide a reasonable explanation for denying or lowballing a claim within a reasonable timeframe.
How to Fight Back Against Unfair Claim Tactics
If you suspect an insurer is unfairly delaying, denying, or underpaying your claim, take these steps:
- Keep Everything in Writing: Communicate with adjusters in writing (or send follow-up emails summarizing phone calls) to maintain a paper trail.
- Gather Comprehensive Records: Retain every medical bill, discharge summary, repair estimate, and police report.
- Do Not Sign Full Release Waivers: Never sign a final release or liability waiver without consulting a lawyer, as doing so permanently bars you from seeking additional compensation.
- Get an Attorney Involved: An experienced attorney can evaluate your policy, handle all communications, and pursue formal legal action if bad faith or breach of contract has occurred.
Get Strong Legal Representation Today
You don’t have to face insurance companies alone. At PM Law Firm, we stand up to insurance adjusters to ensure our clients receive the full compensation they are entitled to under Texas law. Contact us today to schedule your complimentary consultation.