Compensatory Damages For Bad Faith Insurance Claims

Various types of damages can be awarded for plaintiffs because of bad faith insurance claims. These damages can vary with different claims as they are dependent on factors such as these:

  • The original suit that was filed with the Insurance company
  • The losses the policyholder endured due to the bad faith practices.
  • The acts of bad faith committed by the insurance company

Bad Faith Insurance Claim

Compensatory Damages For Bad Faith Insurance Claims:

The following list is an indication of the available compensatory damages allowed by Texas law to grant awards to cover for losses suffered due to:

  1. Relocation costs (for property owners)
  2. A covered disaster (i.e. the actual damages to the property that is insured)
  3. The acts of bad faith
  4. Property damage claims i.e. hail damage or wind storms. The compensatory damages can include but are not limited to:
    • Contractor estimates
    • Construction material and labor fees
    • Future repairs relating to the original damage
    • Lost wages
    • Relocation costs of the property owner

Additional Damages Relating To Bad Faith Insurance Claims:

Besides economic damages, the law also allows recovery for legal fees. This means that the Insurance company that acted in bad faith may also be liable for:

  • Repairs necessary for restoring the property after the damages caused by the covered event.
  • Contractor’s fees including overhead costs
  • Reasonable attorney fees relating to resolving the bad faith claim.

Lawyers from an experienced law firm specializing in bad faith claims can assist you in filing a case against the Insurance company in question. They are familiar with the tactics used by Insurers to underpay, deny or delay insurance claims and can challenge these tactics effectively in a legal setting.

bad faith insurance

Punitive Damages For Bad Faith Insurance Claims:

Some bad faith claims can result in punitive damages, also referred to as exemplary damages. These damages are meant to punish Insurance companies for their bad conduct.

Punitive Damages Can:

  • Be granted when negligent, malicious, fraudulent or criminal acts are associated with a claim or when the insurance company has a history of acting in bad faith.
  • Significantly increases the value of a claim.
  • Serve as leverage for getting an insurance company to settle the claims neutrally. When the insurance company is aware of the possibility of punitive damages being awarded by the jury, it can persuade them to settle pretrial to avoid paying higher jury awards which may include punitive damages.

Reasons, Why An Insurance Company Get ’S Used For Bad Faith:

  • Unjustified denial of coverage
  • Failure to communicate applicable information with the claimant
  • Failure to conduct a sensible investigation of the claim
  • Refusal to pay the claim without investigating
  • Failure or pay or deny the claim within a rational time limit
  • Failure to deny or confirm coverage within a sensible time limit
  • Offering considerably less money to settle than the accurate value of the claim
  • Failure to punctually provide a reasonable explanation for denying a claim
  • Failure to attempt to come to an equitable and sensible settlement when liability is transparent
  • Failure to enter into any negotiations for settling the claim
  • Failure to respond to a time-limit demand
  • Failure to disclose policy limits
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