Understanding Bad Faith
Tactics of Insurance Companies
Statistics from a personal injury study by Martindale-Nolo Research indicate that plaintiffs who accepted the insurance provider's first offer received settlements that were, on average, $30,700 lower compared with those who held out for a better deal. Insurance companies are required by law to investigate, negotiate, and settle all personal injury claims in good faith and fair dealing. Some insurers, however, use bad faith tactics, including offering ridiculous initial settlement offers, denying valid claims, low-balling, and misrepresent the law when settling injury claims.
If the insurance company has denied your injury claim without a valid reason or is negotiating in bad faith, you need to speak with an experienced Texas personal injury attorney immediately to protect your rights. At Jose Orihuela, Attorney at Law, I can review your personal situation and determine whether your claims have been affected by bad faith tactics. As your legal counsel, I will fight vigorously on your side to represent your best interests and attempt to recover your rightful compensation. My firm proudly serves clients across Houston, South Houston, Pasadena, Friendswood, Texas, and the surrounding areas.
Common Bad Faith Tactics
Getting injured in a traffic accident can be a difficult and emotional experience. It can be made worse when an insurance provider denies your injury claim or fails to honor its contractual terms. Bad faith tactics can be described as dishonest or unfair practices that insurance companies use to deny, delay, or minimize injury claim payments. Some common bad faith tactics of insurance companies include:
Low-ball First Offer
The insurance company may offer the claimant a very low first settlement offer and hope it's accepted. Settling a personal injury claim for an unreasonable or ridiculous amount is considered an act of bad faith. Due to the financial ramifications of the accident, most people are pressured into taking the first offer to settle medical expenses, repair vehicle damage, and deal with other losses. You should never settle your injury claim until you have reached the Maximum Medical Improvement (MMI) or determined the full extent of your injuries and other damage.
Under Texas law, a valid claim must be accepted or denied within 15 days but may be extended another 45 days on the proper grounds. Some insurance providers may drag out settling your claim by ignoring your calls or failing to respond to communications. They employ these unreasonable delay tactics to frustrate claimants and see whether they'll stop pursuing their injury claims.
Failure to Conduct an Investigation
When an injury claim is filed, insurance companies have a duty to promptly and thoroughly investigate the claim. Failing to conduct a thorough investigation or discover evidence relevant to damages or liability issues may be considered an act of bad faith.
Additionally, Texas operates using a modified comparative fault rule, with a 51% bar. This rule stipulates that an accident victim be barred from recovering compensation if they are found to have been 51% or more responsible for the traffic crash.
Claiming liability in a Texas car accident case requires conducting a thorough, private investigation. Most insurance providers fail to do that. Nevertheless, the insurer may try to cite modified comparative fault in order to avoid paying for the victim's injuries.
Misrepresentation of the Law
Another bad faith tactic used by insurance providers is a misrepresentation of the law. This involves deliberately misrepresenting the policy's coverage, interpreting the policy language differently, or against the claimant. Conversely, acting in good faith requires that the insurance company should be honest in their statements regarding the insurance policy, as well as its legal terms.
Texas Unfair Claims Settlement Practices
Pursuant to Texas Insurance Code Section 542.001: “...an insurer engaging in business in the state of Texas may not engage in an unfair claim settlement practice.” Any of the following acts by an insurer constitutes unfair claim settlement practices:
- Knowingly misrepresenting to a claimant pertinent facts or policy provisions relating to coverage at issue.
- Failing to acknowledge with reasonable promptness pertinent communications relating to a claim arising under the insurer's policy.
- Failing to adopt and implement reasonable standards for the prompt investigation of claims arising under the insurer's policies.
- Not attempting in good faith to effect a prompt, fair, and equitable settlement of a claim submitted in which liability has become reasonably clear.
- Compelling a policyholder to institute a suit to recover an amount due under a policy by offering substantially less than the amount ultimately recovered in a suit brought by the policyholder.
- Failing to maintain the information required or a record of all complaints.
- Committing another act that the commissioner determines by rule constitutes an unfair claim settlement practice.
Your Attorney's Role in a Settlement
Filing injury claims and dealing with the insurer following your involvement in a traffic accident can be stressful and overwhelming. If the insurance provider has denied your valid claim or if you believe the insurer is using bad faith tactics, you can have your attorney negotiate on your behalf. An experienced Texas personal injury attorney can protect your rights and help negotiate a fair settlement with the insurance company.
At Jose Orihuela, Attorney at Law, I have devoted my career to handling complex legal issues involving denied claims and bad faith tactics of insurance companies. As your attorney, I will review all of the surrounding details of your case and investigate the insurance company's conduct. Using my extensive experience, comprehensive knowledge, and understanding of the Texas insurance law, I will fight compassionately to protect your rights and help negotiate fair financial compensation to cover injuries and damages.
Call me — Jose Orihuela, Attorney at Law — today to schedule a free one-on-one case evaluation. I will fight on your side to protect your rights and help you pursue your rightful compensation. I'm proud to represent clients across Houston, South Houston, Pasadena, Friendswood, Texas, and the surrounding areas.