The Texas Department of Insurance has the authority to punish insurance companies and agents who commit wrongs. The punishment can be fines or in some cases “cease and desist” orders are issued.
When an insurance company or one of their agents commits a violation of the Texas Insurance Code, the person who sustains actual damages may bring an action for those damages caused by the person or company engaging in the wrongful action. Section 541.151 of the Texas Insurance Code allows for this private cause of action. Any violation of Subchapter B, defined to be an unfair method of competition or unfair or deceptive act or practice in the business of insurance, or Section 17.46(b) of the Texas Business & Commerce Code, may bring this private cause of action against the insurance company or its agent.
A person who prevails in their claim against the insurance company or its agent may obtain the amount of actual damages plus court costs and reasonable and necessary attorneys’ fees, plus any other relief the court determines is proper. If the insurance company is found to have knowingly committed the act complained of, the judge or jury may award an amount up to three times the amount of actual damages.
The above is not a limit of the claims that can be asserted against the insurance company or its agent. There are other claims that can be made in the appropriate situation for violations of other provisions of the Texas Insurance Code and violations of the Texas Deceptive Trade Practices Act. Further, depending on the circumstances, claims can be asserted for Breach of Contract, Fraud, Misrepresentation, Negligence, and several other causes of action.
The important thing to keep in mind in an insurance situation is, when you think you are being mistreated or something just does not seem right, you need to talk with an Insurance Law Attorney. There are lots of attorneys in Dallas, Fort Worth, Arlington, Grand Prairie, Weatherford, and other large and small cities across the state who do Criminal Law, Family Law, Probate, Injury, Bankruptcy, etc., but not that many who do Insurance Law. Only an attorney who does lots of Insurance Law is going to fully understand all your rights under the various laws of the State.