Can You Sue an Insurance Company for Denying Your Claim in Texas?

If you were injured in an accident or you faced significant property damage or other damages and you have insurance to cover your needs, you expect the insurance company to come through for you. Many car accident victims, victims of accidents at home, and other people who need compensation now often end up battling their insurance companies or the at-fault party’s insurance company to get compensation. The Queenan Law Firm’s Arlington, TX bad faith insurance lawyers explain how, in many cases, you can actually sue the insurance company for denying your claim so you can finally get the compensation you need.

When Denied First-Party and Third-Party Claims Can Lead to Lawsuits in Texas

When you sign an insurance policy, you enter into a contract with the insurance company. This contract lays out how much you will pay for coverage and what terms and conditions that involves, and it will lay out what damages the insurance company will pay and what kinds of events trigger that payment. For instance, when you take out a car insurance policy, you agree to pay a monthly premium in exchange for coverage for car accident damages.

When you take out an insurance policy, it often pays for damages in accidents that you cause or accidents that harm you. For instance, homeowners insurance will usually cover property damage from natural disasters like falling tree branches, but it will also cover you if someone else is injured on your property. Similarly, car insurance usually has benefits that cover your injuries in a crash, but it also covers any injuries you cause other people.

If you make a claim against your own insurance, that is called a first-party claim, and any claims against someone else’s insurance are called third-party claims.

First-Party Claims

Whenever you try to make a first-party claim to get payment from your own insurance company, they are required to make a good faith effort to follow the policy – the contract. If they do not, you can often sue them to enforce payment by either taking them to court for a breach of contract or by suing for bad faith insurance.

Third-Party Claims

If you make a third-party insurance claim against someone else’s insurance policy because they injured you, the insurance company might deny the claim by claiming that their policyholder wasn’t at fault. That usually is not an issue for you because you can talk to an Arlington, TX personal injury lawyer and file a lawsuit against the person directly instead of dealing with their insurance company. If the insurance company then acts in bad faith and refuses to cover their insurance customer, the court can still rule against the at-fault party directly and order them to pay you damages regardless of what their insurance company says. It will then come down to a case between the at-fault party and the insurance company to decide who pays you – but someone has to pay for your damages under the court order.

The second situation can become a problem for you if you are on the other side of the case. If someone is injured on your property or in an accident you caused, but your insurance company refuses to step up and pay what they are supposed to, that could leave you on the hook for expensive payments. You can often sue the insurance company at that point for the same kind of issues in a first-party denial: breach of contract or bad faith insurance.

Should I Sue My Insurance Company if they Deny My Claim in Texas?

Often, a lawsuit isn’t necessary for a denied insurance claim. Many insurance claims are denied because of problems with forms or clerical errors that mean the case gets denied without proper review. In this case, filing an appeal with the insurance company might be enough to get the decision reversed and have the payments covered. Working with an attorney, you can fight the insurance company out of court through their own appeals process to get them to cover your injuries or damages.

If that fails, it may be clear that the insurance company violated the policy or acted in bad faith. Bad faith insurance cases usually come up in claims where the claim falls directly within the scope of what the policy is supposed to cover, but the insurance company refuses to cover the costs anyway. If that is the case, your attorney will be able to tell the difference and help you decide whether going to court is necessary.

Insurance companies often make excuses and lean on technicalities to deny claims, and many of the following reasons for denial are red flags that the insurance company is dealing in bad faith:

  • Cancellation of the policy after the claim was made
  • Claims that you didn’t pay premiums when you actually did
  • Unnecessary delays
  • Denials without a listed reason
  • Missing records of a claim
  • Missing records of payment
  • Missing records that a policy existed in the first place
  • Endless requests for additional documentation

Remember that, in many cases, the issue isn’t actually that the insurance company denied the case. Instead, many insurance carriers will simply low-ball their policyholders or offer pennies on the dollar for your injuries. These cases could also be evidence of bad faith or breach of contract, and you should also talk to a Dallas lawyer who sues insurance companies about these cases.

Call Our Texas Bad Faith Insurance Lawyers for a Free Consultation

If your insurance company or a third-party’s insurance company refuses to cover your claim, call The Queenan Law Firm today. Our Texas personal injury lawyers can help you get compensation for injuries you faced even if the at-fault party’s insurance company is being difficult. We can also help fight your insurance company to get you the damages you deserve when the claim is denied under suspicious circumstances. Call us today at (817) 476-1797 to set up a free case consultation.