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Can I Sue an Insurance Company for Denying My Claim?

Posted in Car Accidents on October 9, 2020

Dealing with an insurance company is not easy after an accident in Texas. Insurance companies have a financial interest in the outcomes of claims. An insurer will benefit from avoiding client payouts. For this reason, insurance providers often violate the terms of insurance policies or engage in bad-faith claims practices for their own financial gain. If you are the victim of insurance bad faith in the form of denying a valid claim, you may be able to sue the insurance company in Texas.

What Is Insurance Bad Faith?

Insurance companies deny claims all the time. Not all denials are illegal, invalid or in bad faith. Valid reasons for denying insurance claims include missing information, false information, missed deadlines, liability disputes and lack of insurance coverage. The insurance company receiving your claim must give you a reason if it denies coverage. If it doesn’t, call the insurance company to ask why it denied your claim.

If the insurance company cannot give you a reason, or the reason does not seem valid, you may be the victim of insurance bad faith. Common examples of insurance bad faith are inadequate investigations, requests for excessive proof of losses, unfounded claim denials, lowball settlement offers, delayed payouts and refusal to handle a claim reasonably. No insurance company is going to admit to bad faith. It will be up to you to identify signs of a wrongful denial.

What Are Your Options After an Insurance Claims Denial?

If you suspect the insurance company of handling your claim in bad faith, you have legal options. One is suing the insurance company. Before you file an insurance bad-faith lawsuit, however, talk to an insurance claims attorney in Texas for advice. A lawyer may be able to negotiate a different case outcome without a lawsuit. Requesting an internal review of your insurance claim, for instance, may be enough to achieve a change in the outcome of your case. This is especially likely if your lawyer submits further evidence to support your claim.

Another option is to request an external review. You can contact the Texas Department of Insurance (TDI) to complain about insurance bad faith. The TDI will review your insurance claim and how the insurer responded. If the TDI agrees that the insurer is in the wrong, it may force the company to pay you benefits. Simply hiring an attorney may be enough to convince an insurance company to handle your case better. If not, you and your lawyer can bring a lawsuit against the insurance company for denying your claim instead.

How Do You File a Lawsuit Against an Insurance Company in Texas?

If your lawyer believes suing the insurance company is the best way to resolve your case, he or she can file the paperwork for you. Your lawyer will start by organizing the evidence related to your case. This may include a copy of your insurance policy, letters from the insurance company, summaries of your phone calls with claims adjusters, the denial notice, a police report and your medical records. Then, your lawyer will file a lawsuit with the civil courthouse in your county in Texas, naming the insurance company as the defendant. The lawsuit will describe the legal issue – an insurance bad-faith claim denial – and request an amount in compensation to resolve the case.

The insurance company will receive notice of your intent to sue. It will then have the chance to respond. If the company reconsiders its decision and agrees to offer a fair settlement, this could be the end of your lawsuit. If the insurer continues to deny benefits, however, you and your lawyer may need to proceed to trial. If your side of the case can prove insurance bad faith, the courts will order the insurance company to pay out your original claim, plus additional compensation to penalize the provider. Work with a car accident attorney near you for assistance going up against a company for wrongfully denying your claim.