Texas Unfair Insurance Practices

Regardless of what kind of insurance you have purchased or where in Texas the purchase occurred, the same law applies. So residents of Grand Prairie, Arlington, Mansfield, Dallas, Fort Worth, or Weatherford, all get treated the same.
This will be the first part of a several part writing on “unfair insurance practices”.
Chapter 541 if the Texas Insurance Code, is where the definition and prohibition for unfair and deceptive insurance practices is found. These sections of the Insurance Code are Sections 541.001 thru 541.061, Section 541.151 thru 541.162, and 541.453.
Unfair insurance practices violations are also a violation of the Texas Deceptice Trade Practices Act (DTPA). DTPA violations are found in the Texas Business & Commerce Code, Section 17.46. This list is long and is also known as the “laundry list” of violations subject to civil prosecution.
The Insurance Code statutes listed above allow a private cause of action by a wronged person who has sustained actual damages caused by another’s engaging in any act or practice that is defined as an unfair method of competition or unfair or deceptive act or practice in the business of insurance, or defined as an unlawful deceptive trade practice. This is set out in statute in Section 541.151. The usual violators or this section would be insurance agents and insurance adjusters.
The definitions of unfair and deceptive practices are found in two places: (1) Texas Insurance Code, Sections 541.051 to 541.061; and (2) Business & Commerce Code, Section 17.46(b), also known as the DTPA.
The Insurance Code sections prohibit the following:
1) misrepresentations and false advertising of policy contracts;
2) false information and advertising generally;
3) defamation of insurers or persons engaged in the business of insurance;
4) boycott, coercion, and intimidation in the business of insurance;
5) false financial statements;
6) stock operations and advisory board contracts;
7) unfair discrimination;
8) rebates;
9) deceptive names, words, symbols, devises, and slogans;
10) unfair settlement practices; and
11) misrepresentation of insurance policies.
Of these listed prohibitions, the most commonly used by experienced Insurance Law Attorneys are those related to unfair settlement practices and misrepresentations of insurance policies. Certainly the others apply in some situations and each case has to be looked at closely.