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Hope for the best but prepare for the worst.  This is why you purchase insurance.  You research the different policies, comparing the features and the companies’ promises, and you purchase a policy.  You make your payments on time, giving the insurance company thousands of dollars for a policy you may never even use.   But then the worst happens.  You’re in a car accident.  Or you’re diagnosed with cancer.  You’re lucky to have had the forethought and the discipline to purchase insurance for this very event, right?  Now you can continue having a roof over your head.  Or you can pay for those life-saving medical treatments you could never afford on your own.  You submit a claim, only to receive a generic form letter telling you that your claim has been denied.  Even though you diligently upheld your end of the bargain with the insurance company, and it happily accepted your premium payments, you have been abandoned under the direst of circumstances.

Left-wing propaganda?  Isolated cases of a few bad apples?  Think again.  These practices happen all day, every day, by some of the most popular and powerful insurance companies around.  Companies, like Allstate, which promise that you will be “in good hands.”  Companies like State Farm, which compares itself to a “good neighbor.”  Farmers, too, promises to “get you back where you belong.”  In reality, these three companies have been rated among the top ten worst insurance companies in America, in terms of refusal to pay claims, delayed claims, and paying only part of what you are owed under the policy.  Other companies enjoying this dubious distinction include Unum, AIG, Conseco, WellPoint, UnitedHealth, Torchmark, and Liberty Mutual.

These companies have one thing in common.  They care more about profits than they do about policyholders.  Allstate CEO Thomas Wilson once admitted that Allstate’s “obligation is to earn a return for our shareholders.”  Allstate’s shareholders may be in good hands, but where does that leave you?     A senior executive at the National Association of Insurance Commissioners (NAIC), a group representing those charged with overseeing the insurance industry, admitted, “the bottom line is that insurance companies make money when they don’t pay claims.” This tension, between profits and policyholders, is the root of the problem.   Insurers’ greed for profits saturates the entire field and filters down to its claims handling employees.  Claims adjusters are rewarded for denying claims.

So what will you do when your claim is denied?  Thankfully, even though the insurance companies literally have your life in their hands, you have an ace in the hole.  Texas law imposes on insurers a duty to deal with its insured with a high standard of care.  If an insurance company breaches its contract with a policy holder, the policy holder may have a cause of action which in Texas is called “First Party Bad Faith Litigation.” This is an action against an insurance company where the insurance company has without proper cause failed to compensate the insured for loss covered under the policy, unreasonably delayed in making payments, failed to adequately pay a claim, or failed to fully investigate whether a claim is covered under the policy.  By instituting this kind of lawsuit you finally exert the kind of pressure that insurers respond to – pressure on their bottom line.  Insurance bad faith lawsuits cost insurers money to defend, and if they lose, not only do they have to pay the amounts due under the policy, but under some circumstances they have to pay three times the amount due under the policy to punish the company for its bad conduct.

If you’ve been forced to battle your insurance company in your hour of need, contact an attorney well-versed in consumer and bad faith insurance lawJulie Johnson regularly represents individuals in first party bad faith litigation, and has the expertise and resources to fight for what you are owed.