Dealing with insurance companies can be tedious and frustrating. But when an insurance company denies your claim, it can turn into an all-out nightmare.
Insurance companies are concerned with their bottom line. That means that they will look for any excuse to deny your claim.
If they can’t deny your claim, they will likely undervalue your damages and try to get you to accept a settlement for less than you are entitled to.
You may be especially vulnerable if your claim is based on a natural disaster, where many people are filing claims at the same time.
For example, Hurricane Harvey in 2017 displaced more than 39,000 people, damaged 204,000 homes, and caused $125 billion in damage.
In situations like that, insurance companies face the possibility of paying out millions of dollars in claims, and they will do everything they can to minimize their liability.
If you believe your insurance company wrongfully denied your claim, you should contact an insurance lawyer in Houston as soon as possible.
Houston insurance lawyers can review your case and determine whether you have grounds to sue the insurance company for the full value of your claims.
How Does the Insurance Claim Process Work?
When you incur damage that is insured, you can start by filing a claim with the responsible insurance provider.
An adjuster opens a case, gives you a claim number and begins to investigate.
After investigating, the adjuster notifies you of whether the insurance company is approving or denying your claim.
If the insurance company approves the claim, you then work with the adjuster to determine the value of your claim, usually by getting estimates or appraisals.
If the insurer denies your claim, you should consider getting advice from a Houston insurance lawyer.
What Is the Difference Between a First-Party and Third-Party Insurance Claim?
There are two types of insurance claims.
You can file a first-party insurance claim with your own insurance company for losses covered by your policy.
If another person caused your losses, you can file a third-party insurance claim with the wrongdoer’s insurance company.
A third-party insurance claim is most often filed after an accident or bodily injury.
If your first-party claim is denied, you can sue your insurance company to challenge the basis of the denial or to allege bad faith on wrongdoing by the insurance company.
If your third-party claim is denied, you can have an attorney send a demand letter to the insurance company outlining the basis of your claim.
If the insurance company still won’t settle, you can file a lawsuit against the third party, which their insurance company will litigate.
What Are the Reasons an Insurance Company Might Deny My Claim?
There are a number of reasons an insurance company might deny your claim, such as:
- The damage you incurred was excluded from the policy,
- The accident was not reported on time,
- The policy has lapsed due to unpaid premiums,
- The damage was caused by normal wear and tear,
- The damage isn’t sufficiently documented,
- You didn’t take reasonable steps to minimize the damage,
- The damage is less than your deductible, or
- The company believes you have falsely represented your claim.
If you disagree with the reason for the denial or if the insurance company didn’t give you a reason, it may be time to contact an insurance lawyer in Houston.
What Remedies Do I Have If the Insurance Company Denies My Claim?
Although it is frustrating when an insurance company denies your claim, you are not without recourse.
There are many grounds on which you can challenge an insurance claim denial.
A Houston insurance lawyer can help you determine which of those grounds apply to your case.
All Texas insurance contracts include an implied covenant of good faith.
This means that the insurance company has to act fairly and honestly in its dealings with you.
If an insurer behaves wrongfully in denying your claim, you may be able to pursue a bad faith claim against the insurance company.
Both the Texas Unfair Claim Settlement Practices Act and the Unfair Methods of Competition and Unfair or Deceptive Practices Act prohibit insurance companies from engaging in acts such as:
- Refusing to settle when liability is clear,
- Unreasonably delaying settlement,
- Failing to provide a reasonable explanation for a claim denial,
- Failing to approve or deny a claim within a reasonable time,
- Denying a claim without a reasonable investigation,
- Knowingly misrepresenting material policy provisions or facts,
- Failing to acknowledge receipt of a claim or other communication about the claim,
- Offering substantially less than what is fairly owed, or
- Failing to keep records of complaints.
If an insurer violates a provision of these statutes, they may have acted in bad faith.
Additionally you may be able to pursue a bad faith claim if the insurer:
- Made payments without explaining what they mean,
- Failed to explain an arbitration appeal policy,
- Required you to submit the same information multiple times and denied the claim for failure to do so,
- Requested unnecessary documentation,
- Advised you not to hire an attorney,
- Wrongfully accused you of misbehavior or fraud,
- Increased premiums after a claim when you were not at fault, or
- Threatened you.
Your attorney can help you determine which of these circumstances might support a bad faith claim in your case.
The Insurance Company Made a Mistake
Sometimes an insurance company denies your claim in good faith, but the denial is nevertheless wrong.
For example, it’s possible that a provision in your insurance contract may be reasonably interpreted in more than one way.
If the insurance company denied your claim based on their good faith interpretation of the policy, you can dispute their interpretation in court.
Insurance lawyers in Houston know how to interpret insurance policies and build a strong argument in support of your claim.
If your lawyer can show that your interpretation has a reasonable chance of being correct, they may be able to convince the insurance company to negotiate a fair settlement.
Or if the insurance company won’t settle, your attorney can take the matter to court.
How Can an Insurance Lawyer in Houston Help Me?
If you have suffered an insurance claim denial and don’t know what to do, contact the Johns Law Firm today.
We are insurance lawyers in Houston with decades of experience handling insurance cases. In fact, we have represented insurance companies in the past, so we know their strategies and tactics.
We are dedicated to providing our clients with the best possible representation and giving them a leg up against the insurance companies.
Call us today or contact us online for a free consultation.