Texas law requires that insurers adhere to their fundamental duty to act in good faith and engage in fair dealing with their policyholders. Failure to do so may expose the insurer to liability. Here at Berg Plummer Johnson & Raval, LLP, our Houston bad faith litigation lawyers represent policyholders who have been subjected to the bad faith conduct of an insurer, and as a result, have suffered damages.
Basics of Bad Faith Liability
In Texas, as in other states, there are generally two categories of bad faith claims: first-party bad faith claims and third-party bad faith claims. Each operate on fundamentally different principles and arise from unique causes of action.
First-party bad faith claims are brought by the policyholder against their insurer when the insurer has engaged in bad faith conduct relating to the policyholder’s own insurance claims. For example, if the insurer wrongfully denies your windstorm claim, then you would be entitled to challenge the denial, then file a first-party bad faith insurance claim against them to recover damages.
Third-party bad faith claims are brought by the policyholder against their insurer in relation to a lawsuit (that itself was brought by a third-party). For example, if you are being sued by a plaintiff in a motor vehicle accident lawsuit, and your personal liability insurer refuses to step in to defend you in litigation, you might be entitled to sue your insurer for third-party bad faith.
Insurers in Texas have two important duties with regard to third-party lawsuits: 1) they have a duty to defend you in litigation where the claims are covered by the insurance contract, and 2) they have a duty to act reasonably in your interests when settling such claims. If your insurer steps in to defend the lawsuit on your behalf, for example, but subsequently fails to reach a reasonable settlement with the defendant (when it was clearly possible), then they may have acted in bad faith — you might then be entitled to damages.
Our Houston Bad Faith Litigation Lawyers Fight for Your Rights
Damages for bad faith can vary substantially, as each bad faith situation can be quite different from one another, depending on the circumstances. In a first-party bad faith scenario where the insurer wrongfully denied you benefits to which you were entitled, you might be able to sue and recover for financial losses (plus interest), emotional distress relating to the denial of your claim, and even punitive damages if the insurer acted fraudulently or with malice. In a third-party bad faith scenario, where the insurer failed to reach a settlement that fell within the coverage limits, thus exposing you to significant personal liability, you would be entitled to recover those damages over and above the coverage limits.
Bad faith litigation can be quite complicated, and insurers tend to be aggressive when defending against such claims. Often, insurers do not want to give the appearance that they are willing to settle a claim brought pursuant to an assertion of bad faith, as the perception of weakness could inspire others whose claims they have wrongfully denied to litigate their own claims. As such, the experience and skill of your attorney is of prime importance. Your attorney must be capable of effectively navigating the difficulties of bad faith litigation and securing a favorable result on your behalf.
The Houston bad faith litigation lawyers at Berg Plummer Johnson & Raval, LLP have decades of experience litigating bad faith insurance claims at both the state and federal level on behalf of policyholder clients. We work diligently to protect our clients’ rights.
Contact Our Houston Bad Faith Litigation Lawyers Today
Every client is different, and here at Berg Plummer Johnson & Raval, LLP, we offer dynamic fee arrangements that are customized for each client’s particular needs. Our arrangements take into account your budget limitations and strategic goals and are designed to help you achieve favorable results while keeping costs within certain defined parameters. Call us at (713) 526-0200 or contact us online to schedule a consultation