The Heart Of Bad Faith Insurance

Any Insurance Law Attorney knows the heart of the law regarding bad faith insurance is found in the Texas Insurance Code.  Other sources include the Texas Department of Insurance and the Texas Administrative Code, among other sources.

The Texas Insurance Code, Chapter 541, defines and prohibits unfair and deceptive insurance practices.

The statutes allow a private cause of action by any 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 found in Section 541.151.  The definitions of unfair and deceptive practices are found in two places: (1) Texas Insurance Code, Sections 541.051 to 541.061; and (2) Section 17.46(b) of the Business & Commerce Code, the Texas Deceptive Trade Practices — Consumer Protection Act (DTPA).

The Insurance Code sections prohibit:

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;

11)  misrepresentation of insurance policies.

The most commonly used provisions are those relating to unfair settlement practices and misrepresentations of insurance policies.

Anytime a person has a questions about not being treated right regarding their insurance policy or claim, they need to contact an Insurance Law Attorney.