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Cedrick Forrest Jan. 24, 2023

Is It “Bad Faith” when You Have Your Property Damage Claim Denied?

Texas laws lay out clear signs of bad faith on the part of insurance companies. If you don’t know exactly what constitutes bad faith, this is the blog for you. In Texas, it is illegal for insurance companies to use unfair methods of competition or an unfair or deceptive act or practice in the business of insurance. If you suspect that a section of the Texas Insurance Code, listed below, is being broken by your insurance company, then click the following link and let a skilled bad faith insurance lawyer like Cedrick D. Forrest sue your carrier and get the justice you deserve. “Sec. 541.060. UNFAIR SETTLEMENT PRACTICES. (a) It is an unfair method of competition or an unfair or deceptive act or practice in the business of insurance to engage in the following unfair settlement practices with respect to a claim by an insured or beneficiary: (1) misrepresenting to a claimant a material fact or policy provision relating to coverage at issue; (2) failing to attempt in good faith to effectuate a prompt, fair, and equitable settlement of: (A) a claim with respect to which the insurer's liability has become reasonably clear; or (B) a claim under one portion of a policy with respect to which the insurer's liability has become reasonably clear to influence the claimant to settle another claim under another portion of the coverage unless payment under one portion of the coverage constitutes evidence of liability under another portion; (3) failing to promptly provide to a policyholder a reasonable explanation of the basis in the policy, in relation to the facts or applicable law, for the insurer's denial of a claim or offer of a compromise settlement of a claim; (4) failing within a reasonable time to: (A) affirm or deny coverage of a claim to a policyholder; or (B) submit a reservation of rights to a policyholder; (5) refusing, failing, or unreasonably delaying a settlement offer under applicable first-party coverage on the basis that other coverage may be available or that third parties are responsible for the damages suffered, except as may be specifically provided in the policy;

(6) undertaking to enforce a full and final release of a claim from a policyholder when only a partial payment has been made unless the payment is a compromise settlement of a doubtful or disputed claim;

(7) refusing to pay a claim without conducting a reasonable investigation with respect to the claim;

(8) with respect to a Texas personal automobile insurance policy, delaying or refusing settlement of a claim solely because there is other insurance of a different kind available to satisfy all or part of the loss forming the basis of that claim; or

(9) requiring a claimant as a condition of settling a claim to produce the claimant's federal income tax returns for examination or investigation by the person unless:

(A) a court orders the claimant to produce those tax returns;

(B) the claim involves a fire loss; or

(C) the claim involves lost profits or income.”


If your insurer is delaying payment or you have had your property damage claim denied wrongfully, it is essential that you contact a skilled property damage lawyer to assist with this often-complex process. The attorneys at the Cedrick D. Forrest Law firm are experienced, willing, and ready to advocate on your behalf to ensure that your property is repaired and that your rights are not jeopardized.


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