If your home was burglarized, would you sit back and do nothing? No. You would likely call the police or law enforcement to report the burglary, and hope they find your stolen property. If the police arrested the person who stole your property, would you let that person off without punishment, accountability, and repayment for your stolen property? Hopefully not – you would hold them accountable because they violated the law, and took something that belonged to you – they deprived you of your property that you worked hard to earn and purchase.
So why wouldn’t you hold the insurance company, adjusters, or other insurance personnel accountable if they violate the law? Maybe you didn’t know that you could, but you can, which is why its incredibly important to know your rights under the Texas Insurance Code.
In Texas, insurance policyholders have rights under various laws, and insurance companies and their adjusters and personnel have particular laws that they are required to follow in every claim. There are several relevant laws that govern insurance practices in Texas, but this article focuses on Chapter 541 of the Texas Insurance Code titled “Unfair Methods of Competition and Unfair or Deceptive Acts or Practices”.
Chapter 541 of the Texas Insurance Code defines, explains, and prohibits various practices and acts in the insurance industry and the handling of an insurance claim.
Of specific importance, Chapter 541 of the Texas Insurance Code sets out various unfair claim settlement practices as well as examples of insurance misrepresentations that violate the law. Examples of violations of Chapter 541 of the Texas Insurance Code include (but are not limited to):
- If an insurance company, adjuster, or insurance professional refuses to pay a claim without conducting a reasonable investigation of the claim;
- If an insurance company, adjuster, or insurance professional fails to promptly provide a policyholder with a reasonable explanation of the basis in the policy for the insurer’s denial of a claim or offer of a compromise settlement;
- If an insurance company, adjuster, or insurance professional fails within a reasonable time to affirm or deny coverage of a claim to a policyholder;
- If an insurance company, adjuster, or insurance professional fails, refuses, or unreasonably delays a settlement offer;
- If an insurance company, adjuster, or insurance professional makes an untrue statement of material facts;
- If an insurance company, adjuster, or insurance professional misrepresents the terms, benefits, or advantages of the insurance policy.
The above are only a few of the many detailed violations under Chapter 541 of the Texas Insurance Code.
In Texas, if an insurance company, insurance agent, adjuster, or other insurance personnel, violates and/or does not comply with this section of the Texas Insurance Code, insurance policyholders have rights they can exercise against the violators. For example, an insurance policyholder can bring legal action against anyone, including their insurance company or adjuster, who violates these laws – legal action can be brought through the filing of a lawsuit.
Under Chapter 541 of the Texas Insurance Code, a plaintiff (someone who bring a lawsuit against another) who prevails in a legal action against the insurance company, adjuster, insurance agent, or insurance personnel, may obtain the amount of actual damages, plus court costs and reasonable and necessary attorney’s fees, as well as any other relief the court determines is proper.
Texans whose home or business was damaged by the recent hail events have rights, and they have recourse available to them if the insurance company and/or adjuster violates the Texas Insurance Code. As always, it is important to seek help from legal professionals who are highly experienced in insurance law – many attorneys, like Merlin Law Group’s Texas office, offer free initial consultations to help policyholders learn their rights and potentially seek recourse.
Know your rights, and hold the insurance company, adjuster, and other insurance personnel accountable for their actions.