Whether you lose property in a natural disaster or suffer injuries in a car accident, an insurance claim can provide a financial lifeline. Unfortunately, insurance companies may offer less than your claim is worth — or deny your claim outright. In this post, an experienced insurance law lawyer discusses what to do when your insurance company refuses to pay.
First-Party Insurance vs. Third-Party Insurance Claims
After an accident, you may file an insurance claim with your own insurance company. For example, homeowners’ insurance may cover the cost of repairing your home or replacing your property after a storm. Your auto insurance often covers damages from car accidents. These are first-party insurance claims.
Claims against another person’s insurance are third-party claims. For example, if an at-fault driver injured you in a truck accident, you may file a claim against their insurance company. Similarly, someone injured on your property may file a claim against your insurance.
Legal Remedies for Insurance Disputes
When you purchase insurance, you sign a contract with the insurer that outlines each party’s rights and responsibilities. If you file a first-party claim and your insurance doesn’t offer enough, you may have several options:
1. Request an Appraisal
Auto and homeowners' insurance policies may include an appraisal procedure for complaint resolution. For example, you and the insurer can hire separate appraisers in property damage disputes. If their damage estimates differ, a third appraiser can break the tie.
2. File an Appeal
Sometimes, insurance claim denials are due to clerical mistakes or form errors. In these cases, simply appealing the decision may be enough for the insurer to reverse it. An insurance law lawyer can help you go through the appeals process.
3. File a Complaint
If you believe your insurer is underestimating your damages or treating you unfairly, you can file a claim with the Texas Department of Insurance.
4. File a Lawsuit
Suing insurance companies may be necessary if other dispute resolution methods fail. When your insurer refuses to pay a legitimate claim or engages in unfair practices, an insurance law lawyer can help you bring a bad-faith lawsuit.
Bad-Faith Insurance Practices
Simply disagreeing with insurance decisions isn’t typically enough for a bad-faith claim. However, if your insurer does any of the following, it may indicate that they are acting in bad faith.
- Denying your claim without a valid reason
- Refusing to pay a claim without investigating it
- Saying they don’t have records of your claim, your payment, or your policy
- Misrepresenting the facts or provisions of your coverage
- Continuously requesting additional documentation or otherwise creating unnecessary delays
- Failing to deliver a fair and prompt settlement of a reasonably clear claim
- Cancelling your policy after you make a claim
How an Insurance Law Lawyer Can Help
If you’re having trouble receiving fair payment for your claims, an insurance law lawyer can help. Attorneys typically start by writing a letter to the insurance company. Sometimes, just the threat of legal action can change their decision. If not, you and your attorney may decide to pursue a bad-faith lawsuit.
In Texas, the statute of limitations for bad-faith lawsuits is two years. That means wrongful denial claims must be brought within two years of either 1) the date the claim was denied or 2) the date the policyholder discovered (or should have discovered) the bad-faith action.
Whether your insurer is ignoring your calls or has denied your legitimate claim, the Houston insurance law lawyers at McLaurin Law, PLLC, can help. Call us at 713-461-6500 today to schedule a consultation.
