Fort Worth First Party Insurance Claims Attorneys

Holding Insurers Accountable to Policyholders – Tarrant County Bad Faith Insurance Lawyers

Whether the roof of an insured’s home is damaged by hail or a policyholder’s vehicle is totaled by an uninsured driver, the insurance company has a duty to promptly handle the claim fairly.  Insurance companies in Texas owe their policyholders a common law duty of good faith and fair dealing as well as statutory obligations under Chapter 541 and 542 of the Texas Insurance Code.  When insurance companies fail to honor these duties, they can be liable for damages both for breach of the insurance contract and insurance bad faith.  Fort Worth first party insurance claims attorneys at FH Law Group represent policyholders in seeking settlements and pursuing lawsuits against insurers who fail to handle their customer’s claims properly.

Insurance Companies’ Duty of Good Faith and Fair Dealing Toward Policyholders

The duty of good faith and fair dealing owed by Texas insurance companies toward their insured arises from Texas common law (judicial decisions).  This duty has also been codified in Chapter 541 and Chapter 542 of the Texas Insurance Code.  Obligations of good faith and fair dealing owed by insurers toward their customers are based on the nature of the relationship between the parties.   Insurers inherently have a distinct advantage over their policyholders because of more extensive resources, bargaining power, and knowledge.  Insurers’ duty of good faith and faith dealing also is supported by the inherent conflict of interest between their duties to fully pay claims and their objective to maximize profits for shareholders.

First Party Insurance Claims

A first party insurance claim is made by a policyholder against his or her own insurance carrier.  Examples include the following:

  • Homeowners who request their insurance company to repair damage to their residence caused by fire, storms, vandalism, and other covered perils
  • Businesses requesting that their commercial insurance carrier provide a defense against a lawsuit
  • Vehicle owners pursuing an uninsured/underinsured (UM/UIM) claim after being a victim in a hit and run crash
  • Companies requesting structures be repaired following a tornado or other covered peril

Texas Insurance Code Chapter 541 & Chapter 542

The Unfair Methods of Competition and Unfair and Deceptive Acts or Practices (Chapter 541) specifies conduct that insurers must avoid.  These prohibited practices include acts, such as:

  • Failing to attempt in good faith to reach an equitable, prompt, and fair settlement where liability is reasonably clear
  • Neglecting to perform a reasonable investigation before declining to pay a claim
  • Misrepresenting a policy provision or material fact relevant to the claim
  • Refusing to provide an adequate explanation for denying a claim

When an insured prevails under Chapter 541, the policyholder’s recovery could include:

  • Actual damages (e.g. covered losses under the claim)
  • Attorney fees and court costs
  • Up to three times the amount of actual damages based on the circumstances (knowing violations)

Chapter 542, Subchapter B outlines a process and timeline for insurers to avoid bad faith liability.  Our law firm carefully analyzes the actions of insurance companies in light of these requirements for violations that could provide a basis for liability.  If an insurance company violates Chapter 542, the following damages could be awarded:

  • Amount of the claim
  • Reasonable attorney fees
  • 18 percent interest annually on the amount

Fort Worth 1st Party Insurance Claims Lawyer

We represent both individual and commercial policy holders whose insurance carrier refuses to live up to the promises under their insurance policies.  Fulgham Hampton Law Group assists people with their insurance company in Fort Worth and the surrounding areas of Tarrant County.  Call us today at (817 697-4400 for a free consultation.