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A Guide to Bad Faith Settlement Negotiations

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Worldwide, insurance companies collect over $5 trillion a year in premiums. So, these firms have plenty of money to pay even borderline claims. However, insurance companies make money by collecting premiums and lose money by paying claims. So, they look for a way to deny claims or at least delay payment.

Insurance adjusters routinely push the envelope and negotiate with policyholders in bad faith. Typically, these tactics involve one of the issues examined below. If one of these red flags appears, it’s usually best to contact a New Orleans insurance dispute attorney. When adjusters negotiate in bad faith, the insurance company’s lawyers typically are not far behind. You should lawyer up before they do.

Know Your Rights as Policyholders

Experienced insurance adjusters often assume they can bully policyholders simply because they are not familiar with the law.

Under the common law, which applies in all states, insurance companies have a duty of good faith and fair dealing. In a nutshell, companies must promptly fulfill legal requirements and always be upfront and transparent with policyholders.

Additionally, Texas has a very comprehensive bad faith insurance law. Texas Insurance Code Chapter 541 contains a list of specific items which constitute bad faith. The most common instances are failing to settle the claim in good faith when liability is reasonably straightforward and misrepresenting coverage or other policy issues. Chapter 542 includes some essential investigation and payment deadlines.

Usually, only the insured party can file a bad faith insurance claim in a Texas court. Third-party claimants, like a non-policyholder injured in a car crash, can usually include a bad faith claim with their civil lawsuits.

Be Ready for the “You Set Us Up” Defense

This idea is the most common bad faith defense, especially first-party bad faith claims. The insurance company shifts blame to the insured party, typically arguing that the policyholder failed to provide information or didn’t negotiate in good faith.

Carefully document every interaction you have with the insurance company. Don’t forget to include dates and other information. Furthermore, if you talk to the insurance company about the payment amount, always state the basis for your disagreement and make a note in a diary.

Bath Faith Attorneys

If you set things up right with an experienced Bad Faith Attorney, most bad faith disputes settle relatively quickly. For a confidential consultation with an experienced insurance attorney in Houston, contact Insurance Claim HQ. Virtual and after-hours visits are available.

Once you decide on your lawyer, the burden is on you to prove two things: 

  • The insurer acted in bad faith
  • The insurer did so without good reason

Your lawyer will play a significant part in helping prove these factors to a court. Once you’ve hired an attorney, it’s important to remember all communication with the insurance company goes through your lawyer. It’s a common approach for insurance companies to use the things their policyholders say against them in court.

You must document every aspect of the damage to your home or business. You can achieve this by taking pictures of the damage and making sure an independent adjuster inspects the house. The insurance company will send an adjuster working for them. The adjuster’s job is to make sure the insurance company doesn’t have to pay out anything they don’t want.

If you file a property or casualty claim, don’t hesitate to call the experienced bath faith insurance attorneys at Insurance Claim HQ at (844) 587-8395.

We offer free, confidential consultations to all our prospective clients. Don’t let your claim denial get you down — Insurance Claim HQ has got your back!

FAQs

What are some typical insurance terrible faith disputes?

Misrepresenting policy terms and failure to investigate or pay insurance claims are the two most common bad faith areas.

What remedy is available for bath faith cases?

If the insurance company acts in bad faith, treble damages are usually available.

What excuses can insurance companies use to delay payment?

Usually, there are no excuses for insurance companies to delay payment. The law is the law when it comes to investigation and payment deadlines.

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