Yes, in Texas, you are legally allowed to sue the insurance company that covers you for different matters. In fact, there are numerous different insurance companies that may become liable for a lawsuit. You are allowed to sue your car insurance company if they act in “bad faith,” which includes unfairly denying claims, unreasonably delaying payments, or failing to properly investigate claims. If any of the above occurs, you can file a lawsuit against your car insurance company.
However, if you’re suing another driver’s insurance company after an accident, Texas law requires you to sue the driver directly, not their insurance company. This is because Texas is not a “direct action” state. However, the driver’s insurance company will likely step in to defend them from the lawsuit, after the driver notifies them of the lawsuit.
For health insurance disputes in Texas, suing your health insurance company for wrongfully denied claims or bad faith practices is also allowed. However, you must first exhaust all internal appeals processes with your insurance company. If your health insurance is through your employer, your case will likely be governed by federal Employment Retirement Income Security Act (“ERISA”) law, which has specific requirements and limitations for lawsuits.
Before filing any insurance lawsuit in Texas, it is important to note that Texas Insurance Code Chapter 541 provides specific protections against unfair insurance practices. That law allows you to recover actual damages, court costs, and your attorney’s fees in successful lawsuits.
In cases of knowing violations, such as where the insurance company was knowingly discriminating, wrongful repudiation, or acting in bad faith, you also may be entitled to up to three times the actual damages.
It is important to remember that Texas has specific time limits (i.e., statutes of limitations) for filing insurance lawsuits. As such, you’ll need to document all communications with your insurance company and gather evidence of their bad faith actions before proceeding with a lawsuit.
How To File a Complaint Against an Insurance Company in Texas
Filing against your insurance company in Texas will depend on which insurance company you are suing. For Texas car accident claims, you can sue your auto insurance company by:
- First, file a complaint with the Texas Department of Insurance (“TDI”) by calling 800-252-3439 or using their online complaint portal
- Before filing, you should gather all relevant documentation, including your policy number, claim information, and communication records with the insurance company
- If the issue isn’t resolved through TDI, you can then pursue legal action against your insurance company, but you must provide them with written notice at least 60 days before filing a lawsuit
In order to sue your health insurance company in Texas, you should:
- First, file a complaint with TDI’s Help Line at 800-252-3439, as they can help with issues involving insurance companies, agents, and adjusters
- For health insurance disputes, you must first exhaust your insurer’s internal appeals process
- TDI can guide you through options for denied claims, including treatment denials and coverage disputes
- If your claim is not resolved via your insurance company’s internal appeals process, you may then sue them through a private civil lawsuit
If you are planning to sue your insurance company through a private civil lawsuit, it is recommended to set up a lawyer consultation with a Texas lawyer experienced in insurance law. They can evaluate your claim and guide you through your best course of legal action to maximize your potential recovery.
What Are Some Common Legal Issues That Happen With Insurance Companies?
Examples of common legal issues with insurance companies in Texas include bad faith practices like unfairly denying claims, unreasonable delays in processing claims, and lowball settlement offers.
For homeowners, frequent issues involve denied hurricane and storm damage claims, while auto insurance disputes often center around undervalued vehicle repairs or total loss valuations of the covered person’s vehicle.
Health insurance conflicts typically involve coverage denials for necessary medical procedures, out of network billing disputes, or delayed reimbursements for claims that were properly made. Additionally, insurance companies may also face legal challenges for failing to properly investigate insurance claims or misrepresenting the insured person’s policy terms and coverage.
How Long Does It Take To Sue an Insurance Company?
Suing an insurance company in Texas typically takes between 6 months to 2 years to reach a resolution on the case. However, the cases may take a longer or shorter period of time, depending on the complexity of the claim.
For more complex claims, such as auto accidents that resulted in a vast amount of injuries or damages, these claims may take multiple years to resolve. For simpler claims, such as minor property damage vehicle claims, the insurance company may resolve the claim in less than one month.
It is important to once again note that you must first provide written notice to the insurance company 60 days before filing a lawsuit under Texas law. After filing your lawsuit, the timeline can vary significantly depending on the complexity of your case, whether it settles or goes to trial, and the court’s schedule.
You should also keep in mind that Texas has a two year statute of limitations for most insurance lawsuits. The time limit for you to file a lawsuit concerning your claim starts from the date when your claim was denied or when the insurance company breached your contract.
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How Much Does It Cost To Sue an Insurance Company?
In Texas, the cost to sue an insurance company will vary significantly, depending on the exact facts and circumstances of your case. Common fees involved in suing an insurance company include initial court filing fees ranging from $300 to $400, fees for properly serving the defendant, and attorney fees.
Fees for an insurance lawyer in Texas can either be hourly or on a contingency fee basis. Most insurance attorneys work on a contingency fee basis, typically charging 30 to 40% of the total settlement amount. In other words, you don’t pay the attorney unless you win your case.
Additional costs may include expert witness fees, deposition expenses, and document preparation, which can add several thousand dollars to the total cost of your lawsuit. However, if you win your case, Texas law does allow you to recover attorney’s fees and court costs from the insurance company in many instances.
What Are Some Remedies Available in an Insurance Claim Lawsuit?
Remedies in an insurance claim lawsuit include actual damages (i.e., the amount of damages you are claiming in your lawsuit), plus up to three times the actual damages if the insurance company knowingly violated the law.
Under the Texas Insurance Code, you can also recover attorney’s fees, court costs, and interest. Additionally, for cases involving bad faith, you may be entitled to additional compensation for your mental anguish, along with punitive damages.
The court can also order the insurance company to fulfill their contractual obligations and pay the full value of your claim, plus all interest calculated from the date your original claim should have been paid.
How Can I Improve My Chances of Winning a Lawsuit Against My Insurance Company?
In order to improve your chances of winning against an insurance company in Texas, you should be sure to thoroughly document all communications with your insurer, including maintaining copies of emails, letters, and notes from phone calls.
It is also important to take photos and videos of any and all damages, keep all of your medical records and repair estimates, and maintain a detailed timeline of all events. It is important to also follow your policy’s requirements exactly, including timely reporting of claims and providing requested documentation.
Further, it is crucial to file your lawsuit within Texas’ two year statute of limitations. It is recommended to also seek representation from an experienced insurance litigation attorney who understands Texas insurance laws and bad faith claims. Having an attorney can greatly increase your chance for recovery, as well as your total recovery amount.
Do I Need a Lawyer To Sue an Insurance Company?
If you are having an issue regarding your insurance company, it is recommended to consult with an experienced insurance lawyer in Texas. LegalMatch can assist you in locating and setting up a meeting with an attorney who has experienced handling insurance matters similar to yours.
Due to the complexity of insurance laws and the resources insurance companies have at their disposal, having an experienced lawyer is essential. Insurance companies maintain teams of experienced attorneys, and attempting to represent yourself could significantly reduce your chances of success.
An experienced insurance lawyer can assist you in navigating Texas Insurance Code requirements, properly valuing your claim, handling all legal procedures, and negotiating effectively with insurance companies.
Additionally, as mentioned above, most insurance attorneys work on contingency fees, meaning you do not have to pay them, unless you win your case. This makes legal representation accessible even if you cannot afford upfront legal fees.
