Because the majority of home purchases are financed, owners and purchasers tend to have homeowners insurance which is required by the lender to safeguard its security interest. Individuals and families that purchase a home for cash also need homeowners insurance to protect what often constitutes their most valuable asset from losses caused by lawsuits or natural perils like storms, hurricanes, tornadoes, fire, vandalism and other covered perils. However, the insurance industry does not generate more profits annually than the Gross Domestic Product (GDP) of all but two nations by fully and promptly paying all legitimate claims. Insurance companies sometimes use bad faith tactics and sharp practices to deny, delay, and underpay homeowners insurance claims.
Strategies Used by Insurance Companies to Deny Homeowners Claims
While insurance companies rely on a multitude of approaches to deny claims, there are common tactics often used to mitigate liability for many homeowners insurance claims. Insurance carriers recognize their advantage over policyholders, which includes experts, insurance defense lawyers, and extensive resources to minimize liability. Insurers often use these advantages along with an insured’s lack of knowledge of the law and the complex terminology of lengthy insurance contracts to justify nonpayment or lowballing of claims.
Without knowledge of the terminology, coverage, exclusions, and policy limitations, policyholders have a distinct advantage when taking on insurance carriers without legal representation. Fort Worth homeowners insurance claims attorneys at FH Law Group are well-versed in Texas property insurance laws and the interpretation of insurance policy language. Frustrated homeowners insurance policyholders place their trust in this knowledge and FH Law Group attorneys’ experience trying over a hundred cases. Some of the strategies we see homeowners carriers use to deny or underpay claims include:
- Canceling policies based on frivolous inaccuracies in the policy applications
- Confusing an insured with unfamiliar terminology
- Repeatedly denying legitimate claims to wear down an insured
- Delaying the resolution of claims to put financial pressure on policyholders
- Using experts with a history of reports and opinions favorable to insurers
Duties Owed by Homeowners Insurance Carriers to Policyholders
Texas insurance law imposes a fiduciary duty on insurers toward their policyholders. While this is a complicated concept, insurers are bound by an obligation to exercise good faith and fair dealing when adjusting and paying a policyholder’s claim. This fiduciary relationship means at a minimum that an insurer must be honest in communications about the claim and look for a basis to pay the claim rather than an exclusion, limitation, or exception to deny coverage.
When a homeowners insurance carrier violates its duty of good faith, the insurer might be liable for damages beyond the losses covered by the policy. Homeowners insurance company tactics that might justify a claim for insurance bad faith include:
- Delaying payment without legitimate grounds
- Failing to conduct a proper investigation of the claim
- Intentionally lowballing a claim
- Misrepresentation or failure to disclose material facts about a claim
- Intimidating a policyholder into accepting less than the value of the claim
- Failing to communicate with policyholders about their claim
These are just a few of the bad faith practices that a homeowners insurance company might employ to avoid paying the full value of a claim in a timely fashion. Our law firm is committed to providing the highest quality legal service when seeking the maximum recovery on a homeowners policy. Contact us today for a FREE consultation at (817) 697-4400 or visit our website.
The Fulgham Hampton Law Group legal team of injury lawyers provides you with skilled litigators that have tried over 100 jury trials in Texas with expertise in matters ranging from car accident cases, complex cases with insurance companies and skilled settlement negotiations. Our injury lawyers are here to help you navigate the complex legal system and make important decisions to ensure you are fairly compensated for your injuries.
Our legal team of personal injury lawyers has over 45+ years of experience and over 100 jury trials in Texas. Our personal injury attorneys have a stellar reputation for dealing with insurance companies, negotiating favorable settlements with insurance companies, providing a thorough and prompt investigation and fighting to make sure you receive all the compensation your entitled to under the law.
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Once you entrust us with your case, we commit to you and your cause and work tirelessly to get you the compensation you deserve. Because we limit the number of cases we accept, our injury attorneys and staff are able to focus on your case and commit the time and resources necessary to achieve the best possible result. We promise you that your case will be handled with compassion and the personal attention and detail you deserve!
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