When you purchase an insurance policy—whether it’s for your home, vehicle, or business—you’re entering into a contract. You agree to pay premiums, and in return, the insurance company promises to provide financial protection when disaster strikes. But what happens when your insurer doesn’t hold up their end of the deal? Unfortunately, many Texans face unjust delays, denials, and underpayments from insurers that fail to act in good faith.
In legal terms, this is known as bad faith insurance. Insurance companies in Texas are legally required to treat their policyholders fairly. When they don't, you may have grounds for a bad faith claim. So how do you know when your insurer is crossing the line? Let’s break down six common signs that your insurance company may be acting in bad faith.
One of the most common red flags is a delay without a clear explanation. Insurance companies in Texas must investigate and process claims within specific timeframes under the Texas Insurance Code. If your claim drags on for weeks—or even months—without updates, it could indicate bad faith. Tactics like requesting unnecessary paperwork, repeating information requests, or offering vague excuses can all point to intentional stalling. Remember: delay is a tactic insurers sometimes use to wear you down, hoping you’ll give up or accept less than your claim is worth.
An insurance company can deny a claim if it's not covered under the policy. However, if your claim clearly falls within coverage and the denial lacks a reasonable explanation, this may be bad faith. Some companies may rely on confusing or misleading language in their denial letters to justify rejecting legitimate claims. Others might deny coverage outright without fully investigating the facts. If you believe your claim was dismissed unjustly, don’t accept the denial as the final word. Texas law provides recourse for policyholders whose insurers deny claims in bad faith.
Lowball offers are another common tactic in bad faith insurance. Instead of denying your claim outright, the insurer may make an unreasonably small settlement offer in hopes you’ll take it and walk away. This is especially common in high-value claims, such as property damage from storms or total loss car accidents. An insurance company acting in good faith will base its settlement offer on legitimate valuations and damage assessments—not arbitrary or inflated depreciation calculations. If your insurer’s offer doesn’t reflect the true cost of your damages, it may be time to push back.
We can help you navigate your rights when an insurer refuses to pay what you're owed. Learn more about how our insurance claims attorneys in Fort Worth can assist with lowball offers and unfair settlements.
Texas insurers are required to conduct a fair and timely investigation of every claim. If your insurance company fails to inspect the damage, refuses to consult with relevant experts, or ignores critical evidence, they may be acting in bad faith. Signs of a poor investigation include:
A thorough, unbiased investigation is essential for a fair claims process. Anything less may be legally actionable.
Insurance policies are notoriously dense and filled with legal jargon. Unscrupulous insurers may take advantage of this complexity by misinterpreting or outright misrepresenting your policy terms. For example, they might claim a type of damage isn’t covered—when in fact, your policy says otherwise. They might also mislead you about deadlines, exclusions, or conditions you must meet. In Texas, insurance companies are prohibited from using deceptive practices. If you feel like you're being manipulated or misled, trust your instincts—and get a second opinion.
Open and honest communication is a key part of the insurance relationship. If your insurer consistently avoids your calls, ignores your emails, or refuses to provide written updates, this could be more than just poor customer service—it may be evidence of bad faith. Texas law requires insurers to acknowledge and respond to policyholders within a reasonable time. If you’re being stonewalled, it may be time to involve legal counsel. Deliberate lack of communication is often a strategy to frustrate and pressure policyholders. Don’t let it work on you.
The Texas Insurance Code and the Deceptive Trade Practices Act (DTPA) both protect consumers from unfair treatment by insurance companies. If you suspect your insurer is acting in bad faith, you have legal options, including:
In many cases, insurers may be required to pay more than the original claim amount if found guilty of bad faith. But navigating these laws and procedures on your own can be overwhelming. That’s where experienced legal help comes in.
At Barrow Law, we fight for Texans who’ve been wronged by their insurance providers. If you believe your insurer isn’t playing fair, contact us today to discuss your situation. We're here to make sure you get the protection you paid for—and the justice you deserve.