What Does “Bad Faith” Mean in Insurance?

• David Kohm


• 27 Mar 2013

People obtaining an insurance policy have a right to expect honest and fair dealing from their insurer during an insurance dispute. Unfortunately, this is not always the case. Sometimes an insurance company will delay the claim or provide misleading or even false information to the claimant. When an insurance company does not deal honestly or promptly with its insured, it may be considered a bad faith claim.

The attorneys at the Law Offices of David Kohm have seen many of these instances and are prepared to fight for the rights of the insured in a bad faith insurance matter.

To prevent personal injury claims from delay or dishonest settlement practices, the state of Texas has enacted the Unfair Claim Settlement Practices Act in its insurance code. The law provides remedies in the event of a bad faith insurance dispute. It provides deadlines for insurance companies to respond to claims, to provide information to an insured person, and for settlement of claims.

For example, an insurer normally has 15 days from the date it receives a claim to acknowledge the claim, begin investigating the claim, and request all information it reasonably believes is needed to review the claim. On many types of insurance disputes, the insurer will have a maximum of 60 days in which to pay the claim. Failure to do so could lead to the payment of interest, penalties, and the payment of attorney fees.

In addition, insurance companies can be penalized for:

• Failing to pay a claim when the liability and damages become reasonably clear.
• Forcing an insured to file a lawsuit to collect on a claim.
• Failing to promptly respond to communication from the insured.
• Misrepresent or provide false information in regard to a policy or status of a claim.

Arlington injury attorney David Kohm has represented many clients in insurance disputes and will seek the full amount of damages and penalties when the insurance company acts in bad faith. Those who feel they may have been misled by an insurance company acting in bad faith should contact the Law Offices of David Kohm at 817-204-0900. The first consultation is at no charge.