What does the term “bad faith” mean in an insurance dispute?

In Texas, the term “bad faith” is used to describe an insurance company’s failure to adhere to its legal or contractual obligations when handling an insurance dispute. This can involve an insurance company denying valid claims too easily, failing to properly investigate claims, or requiring the filing of excessive paperwork. When a person feels that the insurance company is acting in bad faith, they are likely feeling like the company is not upholding its contractual obligations. For example, if an insurance company is denying valid policyholder claims or taking an unreasonably long time to respond to claims, the policyholder may feel that the company is acting in bad faith. If it is determined that a company has been engaging in bad faith practices, the policyholder may be entitled to additional compensation including attorney fees, costs, and punitive damages. In addition, the Texas legislature enacted a law that allows policyholders to file an official complaint with the Texas Department of Insurance if they believe they are being treated in bad faith. In summary, the term “bad faith” in an insurance dispute means a failure to adhere to the legal or contractual obligations of an insurance company. This type of behavior is illegal in Texas, and punitive damages may be obtained if it is found that the insurance company was engaging in bad faith practices.

Related FAQs

What types of damages are covered by insurance?
What is the difference between a policy and a contract of reinsurance?
What legal defenses are available in insurance law cases?
What is the difference between an insurance policy and a contract?
How do I choose an insurance provider?
What is the purpose of an insurance policy?
What is the difference between direct and indirect insurance?
What is the process of obtaining an insurance license?
What is the difference between life insurance and health insurance?
What is insurance law?

What does the term “bad faith” mean in an insurance dispute?

Related FAQs

Related Blog Posts