Insurance Adjusters Can Face Civil Lawsuits in Texas

Have you ever had a questionable or unfair insurance claim settlement in Texas? If so, you may be able to challenge the decision with the help of the bad faith insurance claim lawyers of Millin & Millin.

One party that can be held legally liable for an act of insurance bad faith is the insurance adjuster who handled your claim.

Many people are unaware that insurance claim adjusters — who investigate cases on behalf of the insurance company— can face civil lawsuits in Texas for errors and omissions (E&O) whether they are company, independent or public adjusters. Our bad faith insurance insurance lawyers can determine whether the insurance adjuster lived up to their duties and obligations as fiduciaries under the Texas Insurance Code.

A Brief Note on Unnecessary Lawsuits

Unfortunately, adjusters are sometimes sued unnecessarily either to pressure them to implicate the insurance company’s policy or to defeat diversity jurisdiction (keeping the case out of federal court).

Such cases are usually clear-cut and only result in wasted time and money for everyone involved.

A 2018 Insurance Litigation Report on 93,000 federal district court coverage cases between 2009 and 2017 found that in cases involving bad faith claims, approximately 90% found no bad faith on the part of the insurer, though most of these were resolved by summary judgment – when taken to trial, bad faith findings were closer to evenly split.

Evidence Needed to File a Successful Claim

To bring a successful civil lawsuit against adjusters in Texas, there must be clear facts and evidence or at least red flags that the adjuster has acted in bad faith, either on their own initiative or on behalf of the insurance provider. Some examples of bad faith acts done by an insurance adjuster include:

  • Failure to acknowledge the claim in a timely manner, especially in cases where time is of the essence, such as with property damage.
  • Misleading or false statements such as telling the policyholder that the policy does not cover damage when, in fact, it does.
  • Failure to provide complete information to the insurance company which results in a wrong or inequitable decision (e.g. below the payout required by the policy).
  • Not meeting claim deadlines which could be a stall tactic or result in evidence being lost to the advantage of the insurance company.
  • General lack of responsiveness to the policyholder and not conducting the investigation with proper professional standards.
  • Using ambiguous language in communications to confuse the policyholder or make the case more complicated than it should be.
  • Resorting to high-pressure tactics to bully the policyholder into giving up a claim or settling for an inequitable decision.
  • Denying an insurance claim without providing proper justification and explanation in writing.

Insurance claim adjusters are not neutral third-parties acting on behalf of a corporation that bears all the risk and blame – adjusters have multiple duties under the Texas Insurance Code and can be sued individually or jointly in bad faith cases. These duties include accurately representing facts and policy provisions to both parties (policyholder and insurance company), providing a reasonable explanation for a denied claim or settlement offer, and conducting a reasonable investigation prior to denying a claim.

Having a contractual obligation to the insurance company is not an excuse that adjusters can use to justify unfair decisions or deceptive practices.

Dealing with a bad faith adjuster? Millin & Millin is ready to fight for your rights.

Contact us today at (956) 631-5600 for a FREE case evaluation.

Bad faith claims are often successfully prosecuted in cases of property damage or auto accidents where there is personal injury or even death (frequently involving payouts due to uninsured motorists). If you believe you have been the victim of a questionable or inequitable insurance claim settlement, contact a bad faith insurance claim lawyer as soon as possible to hold the adjuster and/or insurance provider responsible.