Filing A Lawsuit Against An Insurance Company

When a couple in Grand Prairie, Arlington, Fort Worth, Dallas, or Weatherford, has to sue an insurance company, is there anything that they have to do first? The Texas legislature has enacted laws and the Supreme Court of Texas enforces these laws telling us what to do. The quick answer is; see an experienced Insurance Law Attorney. The longer answer follows.
Texas Insurance Code, Section 541.154(a) and (b), tells us that as a prerequisite to filing a suit seeking damages, the plaintiff must give written notice to the other person at least sixty days before filing suit. The notice must tell the other person the specific complaint, and the amount of actual damages and expenses, including attorney’s fees, incurred in asserting the claim. The best way for this to work is that once a person realizes that there is, or is going to be a problem, to write down everything that is happening. Try to remember back to all that has happened and write it down and gather any documents, such as letters, e-mails, faxes, the policy, etc., and get it organized to present to an attorney. Doing this while it is freshest in your memory is better than putting it off.
Texas Insurance Code, Section 541.154(c), tells us that notice is not required if the lawsuit must be filed sooner than the sixty day notice to avoid limitations, or if the claim is asserted as a counterclaim.
Texas Insurance Code, Section 541.155, tells us the punishment for not giving the sixty day written notice. What happens is the lawsuit is abated. This means it cannot go forward until the statute is complied with and the other side is given an opportunity to take corrective action. Plus the courts may limit recovery on the lawsuit if the procedures are not followed correctly.
The reason for giving a sixty day notice is to give the other person the chance to consider making a settlement offer. This is explained in Section 541.156(a). This is encouraged in an effort to prevent litigation on cases that can be resolved. This same section of the Insurance Code says the receiving party of the notice can tender an offer of settlement during this sixty day period. Section 541.156(b) tell the parties they have a statutory right to seek mediation of the case. The statute also sets out the procedures for requesting this mediation. If such a mediation is conducted, the defendant can tender a setllement offer within twenty days after the mediation. If there is no such mediation, the defendant can tender a settlement offer within ninety days after the party’s answer is due.
Texas Insurance Code, Section 541.157 requires any settlement offer to include an offer to pay an amount to settle the claim, and an amount to pay the reasonable and necessary attorney’s fees.
Section 541.158(a) says an offer must be accepted within thirty days or it is considered to be rejected. When the offer is rejected, the defendant may file with the court an affidavit certifying rejection of the offer. The trial court then can compare the offer to the amount of money the plaintiff recovers. If the offer is the same as, substantially the same as, or more than the recovery, the plaintiff is limited to the lesser amount according to Sections 541.158 and 541.159(a). When the court limits the plaintiff’s recovery, the court may also limit the attorney’s fees according to Section 541.159(b). However, Section 541.159(c) says the plaintiff’s recovery cannot be limited if the court finds the defendant could not have performed the offer or substantially misrepresented the offer’s cash value.
In conclusion, to maximize a recovery in an insurance lawsuit, it is important for the Insurance Code statutes to be followed. Failure to properly follow the statutes will result in a lesser recovery. More important to most people is that when the statute is properly followed on letterhead from an attorney, the case may get resolved quickly rather than having a lawsuit that may drag out for many months or years.