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Texas won't put up with insurance companies' bad faith towards their own customers. The Texas Insurance Code establishes defines "unfair settlement practices," or insurance bad faith, as:

  1. Misrepresenting to an insured customer a material fact or coverage policy provision;

  2. Conditioning payment of one chunk of a claim until the entire claim is resolved;

  3. Failing within 15 days of receipt of claim to:

    • Acknowledge receipt of the claim;

    • Commence any investigation of the claim; and

    • Request from the policy holder everything the insurance company then believes will be required of the claimant.

  4. Conditioning payment of one chunk of a claim until the policy holder's agreement to drop other portions of the claim;

  5. Trying to enforce a final release of a claim from an insured customer when the insurance company only made a partial payment;

  6. Failing to timely:

    • Accept or deny coverage of a claim to a policyholder; or

    • Submit a reservation of rights to a policyholder;

  7. Failing to give a policyholder a reasonable explanation for their denial of a claim or for the offer of a compromise settlement of a claim;

  8. Refusing, failing or delaying a settlement offer because other coverage may be available or that third parties are responsible for the lossess;

  9. Failing to attempt in good faith to bring about a prompt, and fair settlement of a claim;

  10. Refusing to pay a claim without conducting a reasonable investigation of the claim;

  11. Forcing a policyholder to file 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;

“There are worse things in life than death. Have you ever spent an evening with an insurance salesman?” – Woody Allen

Remember: your insurance policy is a contract. If your insurance company is not abiding by it, they are in breach of that contract. Their breach can be held to be bad faith and in violation of their duties to you — their client.

Texas law allowed for full compensation of your loss, plus attorney fees and costs, and often even a punitive damage award. Recent legislative changes have diminished these remedies to some extent on some specific property-damage claims.

The law is on your side. Your insurance company often is not. Do not trust them blindly.