Misrepresentation in Insurance: How to Spot When Your Insurer Lies

Insurance is meant to protect you when life takes a wrong turn, but what if the protection you counted on is pulled out from under you? Many people trust their insurance company, only to find the promises in their policy don’t match what happens when they file a claim.

That’s why it’s important to understand how misrepresentation in insurance works and how to spot it. This guide explains what it is, how to recognize it, and what to do if your agent isn’t honest.

Key Takeaways

• Misrepresentation in insurance happens when false or misleading information presented by the insurance company or agent affects your policy or claim.
• Both insurers and policyholders can be responsible for misstatements, whether intentional or not.
• Signs of insurer misrepresentation include misrepresenting policy coverage, available benefits, or your policy terms.
• Texas law protects you from bad faith insurance practices, and legal help can make all the difference.

What Counts as Insurance Misrepresentation?

In Texas, saying untrue details or leaving out important information about your insurance can be misrepresentation. Both you and the insurer can be held responsible for false or misleading information under Texas law.

Misrepresentation by the Insured

When you apply for a policy, you promise to give correct and complete information. If you give false information, hide a material fact, or say something that’s not true, even through an honest mistake, it can be a misrepresentation. 

A material misrepresentation in your insurance application means the wrong information could affect the insurance company’s decision to approve your policy, change your rate, or cover a claim like a car accident. Texas code says the insurance company can only void a policy or deny a claim if you intended to deceive them. 

Misrepresentation by the Insurer

Your insurance company, insurance agent, or insurance adjuster must also tell the truth. Texas law bans misrepresentation of:

• What the insurance coverage does and does not cover
• The insurance benefits you will get
• Any insurance contract terms
• The insurer’s financial strength or bonuses 

Often, insurance agents and representatives will make fasle and misleading statements in an effort to undervalue or outright deny claims. 

Signs Your Insurance Company Is Misrepresenting Your Policy

Insurance companies are supposed to tell the truth and handle your claims fairly. But sometimes, they twist the facts or give false information to avoid paying. If you notice the signs below, your insurer may be engaging in misrepresentation, which could lead to a wrongful claim denial.

• Saying Your Policy Has Expired — Even when your policy is still active, your insurance agent could deny your claim based on the argument that your policy has expired. Always double-check your policy dates and payment records.

• Saying You’re Not Covered When You Are — Another red flag is when the insurance agent says your insurance coverage doesn’t apply to damages clearly listed in your policy. For example, your life insurance policy might include accidental death, but the agent might say you’re not eligible for coverage without clear proof.

• Ignoring Proof of Your Claim — If your insurance company receives all of your documents but claims they haven’t, they may be trying to delay or block your claim.

• Using Excuses to Stall — Delays may signal negligent misrepresentation. Some adjusters claim an internal process is needed first, even when it’s not. These delays can cause serious problems, especially in emergencies.

What To Do If Your Insurance Company Acts in Bad Faith

If you have a bad insurance company that doesn’t keep its promises, it may be acting in bad faith. This means they aren’t being fair or honest about your insurance policy or benefits. Bad faith can happen with life insurance, car accidents, or property damage claims. If you believe your insurance company is acting in bad faith, you can take the steps below:

1. Review Your Insurance Policy

Review your insurance contract carefully. Make sure the insurer’s reason for the claim denial isn’t based on false information or a misinterpretation of the insurance. A wrongful denial could point to insurance fraud or negligent misrepresentation.

2. Talk to an Attorney

If you suspect bad faith, speak with a bad faith insurance lawyer. A trusted team like Millin and Millin Attorneys can help. We’ll review your case, guide you through the next steps, and fight to make sure you get whatever coverage you may be owed.

3. Keep All Proof

Save all documentation and evidence related to your claim, including your emails, letters, phone logs, and receipts. This can help show if the insurance agent or adjusters gave you a false statement, delayed on purpose, or tried to deny your claim unfairly.

4. Report the Misconduct

Still having trouble? You or your lawyer can file a complaint with the Texas Department of Insurance. This step can lead to a full review and possible penalties for the insurer if they broke the law.

5. Seek Compensation

If your insurer acted in bad faith, you might be able to recover damages for:

• What the insurance company should have paid you in the first place
• Any damage caused by the insurance company's delay or denial
• Emotional distress
• Extra money for punitive or property damages if the insurer was especially unfair
• Attorney’s fees, so you don’t have to pay out of pocket

Talk to a Texas Insurance Lawyer for Help With Bad Faith Insurance Claims

If your insurance company isn’t being honest, it can leave you feeling powerless. Understanding how misrepresentation in insurance works and recognizing the signs can help you protect your claim. At Millin and Millin Attorneys, we hold insurance providers accountable for misleading practices and unfair claim denials.

If you've been misled or wrongfully denied, don’t face it alone. Our experienced Texas insurance lawyers are ready to explain your options and fight for the insurance benefits you deserve. Contact us today for a free consultation. Whether you’re dealing with a car accident, health insurance, or a life insurance company, we can help.

Think your insurance agent has given you false information? Reach out to Millin and Millin Attorneys today.

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