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What can I do if my insurance company won't pay my claim?
If your insurance company does not pay as required, does not follow the deadlines for processing and paying a claim, does not offer a reasonable amount of payment or otherwise fails you as a policyholder, you could have, in addition to a breach of contract claim, the following causes of action against your insurance company.
You could sue for late payment of claims.
This claim is found in Section 542 of the Texas Insurance Code. Section 542 (the Late Payment of Claims statute) outlines a number of important requirements that insurers must comply with when processing insurance claims. According to the provisions of Section 542, insurance companies must acknowledge and accept or reject first-party claims within a certain time frame. For example, the insurer must acknowledge a first-party claim within 15 days of receipt and must make payment within five business days of acceptance.
If your insurance company misses the deadlines, it may be in violation of the law. After acknowledging your claim, the insurance company will likely send out a claims adjuster to inspect and evaluate the damage. Insurance companies that fail to comply with the deadlines in Section 542 may be required to pay its policyholders actual damages, statutory interest of 18 percent per year on the amount of money the insurer should have paid, and attorney fees.
You could sue for breach of the covenant of good faith and fair dealing.
This common law cause of action is based on the premise that every contract has an implied duty of good faith to act on the promises made in the contract. The claim you make in these cases is referred to as a bad-faith claim. When an insurance company fails to act in good faith, the insured can collect damages above and beyond the policy limits - including, in some cases, punitive damages. However, you will need to show that the insurance company had no reasonable basis for denying your claim.
You could make a claim under the Unfair Settlement Practices Act.
This claim is found in Section 541 of the Texas Insurance Code. Under this cause of action, if you can prove the insurer knowingly acted in an unfair manner in denying claims or making reasonable payment, it is possible to collect triple the damages you suffered (treble damages) including extra-contractual damages (sums not contemplated by the contract of insurance). For individual policyholders, mental anguish damages may count as damages that are subject to being tripled.