Insurance Bad Faith: When Denials Cost Lives in Bexar

Insurance bad faith is not a rare occurrence in Texas — it is a documented pattern that costs injured Bexar County residents millions of dollars every year. When an insurer denies a valid car accident claim, delays payment without justification, or misrepresents what a policy covers, Texas law provides specific remedies that go well beyond the original claim value.

Video Transcript

I’m Jamie Shaw with Carabin Shaw. The other driver’s insurance adjuster calls, sounds friendly, just wants your side of the story. Should you talk to them? Be very careful. That adjuster works for the insurance company, not for you. The call is often recorded and a simple “I’m doing okay” can be used to slash your claim later. You are not required to give a recorded statement to the other side’s insurer. The safest move — politely decline, and let your attorney handle it. If an adjuster is pressuring you after a San Antonio accident, call Carabin Shaw first. 210-222-2288.

What Constitutes Insurance Bad Faith Under Texas Law

The Texas Insurance Code Chapter 541 and the Texas Deceptive Trade Practices Act both govern insurer conduct in claims handling. The San Antonio car accident attorneys at Carabin Shaw have pursued bad faith claims against insurers who refused to pay clear liability claims, who delayed payment past the statutory deadline without explanation, and who offered settlements that bore no reasonable relationship to the documented damages. The Texas Department of Insurance publishes complaint data that shows which carriers have the highest rates of bad faith complaints in the state.

The Statutory Deadlines Insurers Must Meet

Texas Insurance Code Section 542.055 requires an insurer to acknowledge receipt of a claim within 15 days. The insurer must accept or deny the claim within 15 business days after receiving all items required to process the claim. If the insurer needs more time, it must notify the claimant in writing and provide a reason. Failure to meet these deadlines triggers statutory penalties of 18 percent interest per year on the amount owed, plus attorney’s fees.

Common Bad Faith Tactics Used Against Car Accident Victims

Insurers use several recurring tactics to reduce or deny valid claims. Disputing medical necessity — arguing that treatment was not required by the injury — is one of the most common. Requiring excessive documentation that goes beyond what the policy requires is another. Offering a settlement that does not account for future medical costs, lost earning capacity, or non-economic damages is a form of bad faith when the insurer has documentation showing the full extent of the injuries.

Lowball Offers on Clear Liability Claims

When liability is not in dispute — when the at-fault driver ran a red light, was cited by the responding officer, and the crash is fully documented — an insurer that offers a settlement far below the documented medical costs is engaging in bad faith conduct. Texas law allows the victim to pursue the full claim value plus the statutory penalties when that conduct is established.

First-Party vs. Third-Party Bad Faith

First-party bad faith occurs when a victim’s own insurer — through their uninsured motorist coverage, personal injury protection, or collision coverage — acts in bad faith. Third-party bad faith occurs when the at-fault driver’s insurer acts in bad faith toward the victim. Texas recognizes both, but the remedies and the legal standards differ. First-party bad faith claims under the Texas Insurance Code carry the strongest statutory remedies, including the 18 percent interest penalty and attorney’s fees.

Stacking Bad Faith on Top of the Underlying Claim

A bad faith claim does not replace the underlying personal injury claim — it is added to it. When an insurer’s bad faith conduct is established, the victim can recover the original claim value plus the statutory penalties. In cases involving egregious conduct, punitive damages may also be available under the Texas Deceptive Trade Practices Act.

Documenting Bad Faith Conduct

Building a bad faith claim requires preserving every communication with the insurer from the first contact forward. Every letter, email, phone call log, and written denial should be saved. The dates of each communication matter — they establish whether the insurer met its statutory deadlines. If the insurer requests documentation, the request and the response should both be documented with dates. The Texas Department of Insurance complaint process is a parallel avenue that creates a public record of the insurer’s conduct.

Carabin Shaw has pursued bad faith claims against insurers across San Antonio and Bexar County for over three decades. The firm takes cases on a contingency basis — no fee unless the case is won. Call (800) 862-1260 to speak with an attorney about what the insurer has done.