Unreasonable Denials in Houston Insurance Claims

Policyholders pay premiums with the expectation that their insurer will be there when they need it. However, too often, insurers deny legitimate claims without a reasonable basis. Fortunately, Texas law provides remedies for policyholders who can show the denial was unjustified. Our bad faith insurance claim attorney in Houston can help if your claim has been wrongfully denied.

What Makes a Denial Unreasonable?

Not every denied claim involves bad faith. Under Texas law, insurers are entitled to deny claims that fall outside policy coverage or that lack sufficient documentation. A denial becomes unreasonable when the insurer lacks a rational basis for its decision. That means a reasonable insurer, looking at the same facts, would have approved the claim or handled it differently.

Common Patterns Behind Unreasonable Denials

Unreasonable denials in Houston often follow recognizable patterns. These include:

• Denying a claim based on an exclusion that does not actually apply to the facts of the loss
• Relying on an incomplete or rushed investigation to justify the denial
• Misrepresenting the terms of the policy to the policyholder
• Failing to conduct a reasonable inspection before denying the claim
• Ignoring evidence submitted by the policyholder, including contractor estimates and photographs
• Denying a claim outright instead of paying the undisputed portion of the loss

Successfully challenging an unreasonable denial requires comparing the insurer’s stated reason for denial against the actual language of the policy and the evidence available at the time the decision was made. 

If the insurer ignored evidence, misapplied a policy exclusion, or failed to investigate properly, the claim denial may have been unreasonable. 

Claims that Can Suffer from Unreasonable Denials

Unreasonable denials can occur in many different types of insurance claims. Common examples include:

• Hurricane and windstorm damage claims
• Hail and roof damage claims
• Flood and water damage disputes
• Fire and smoke damage claims
• Commercial property damage claims
• Business interruption claims
• Homeowners insurance claims
• Car accident claims
• Uninsured and underinsured motorist (UM/UIM) claims
• Life insurance claims
• Health insurance claims
• Wrongful death claims
• Premises liability claims
• Truck accident claims

Regardless of the type of claim involved, an insurer must have a reasonable basis for denying coverage. When an insurance company refuses to pay despite evidence supporting the claim, the denial may constitute bad faith under Texas law.

Bad Faith Denials and Damages

When a denial is found to be unreasonable and in bad faith, a policyholder may recover the amount that should have been paid under the policy. A policyholder may also be able to recover additional damages for the insurer’s unreasonable conduct, interest on the original unpaid claim, and attorney’s fees in bringing bad faith proceedings. 

If you believe your property damage or personal injury claim was unreasonably denied, an experienced attorney can help. A lawyer can help you request the insurer’s full claims file, identify what evidence the insurer had at the time of the denial, and determine whether the stated reason for denial holds up under scrutiny. 

Call The Doan Law Firm to schedule a free consultation to discuss your case and legal rights. We handle all types of property damage and personal injury claim disputes.