The Chanin Building, 122 East 42nd Street, Suite 725, New York, New York 10168

Blog Post

Lessons from Hurricane Ike: Texas Revives Statutory Bad Faith

Lessons from Hurricane Ike: Texas Revives Statutory Bad Faith by Evan Schwartz

In the recent decision of USAA Texas Lloyds v. Menchaca, the Texas Supreme Court ruled that homeowners and other insureds can rely on Texas law to seek damages against insurance companies for unfair and deceptive practices in their investigations and payments or non-payments of insurance claims.  

In this case, a homeowner’s claim resulted from property damage caused by Hurricane Ike. Although the damage was not substantial, the Texas Supreme Court ruled that absence of substantial damages does not limit an insured from seeking recovery under the Texas Insurance Code for violations.

This Texas High Court also interpreted the Texas Insurance Code in a very important way, ruling that: If an insured is able to establish their entitlement to benefits under the policy, they then have a claim under the Texas Insurance Code for additional damages—even if they didn’t receive any of the policy benefits.

With this decision, the Texas Supreme Court has revived an existing section of the Texas Insurance Code and has explained how insureds can pursue their rights—allowing those who are harmed by the misconduct of insurance companies to recover extra-contractual, bad faith damages, including: 

•attorneys’ fees;

•costs;

•potential treble damages, and

•other compensatory damages (if able to establish violations of the Texas Insurance Code). 

Any of these violations can be tried to a jury in the State of Texas. 

Texas may be conservative in certain aspects of its law for insurance policy holders, but this ruling creates a true source of leverage against insurance companies. This decision will alter insurance company behavior in Texas, causing them to review, evaluate, and pay claims more fairly. 

Contact us with your questions or comments today.

Evan-Schwartz

 

Evan S. Schwartz
Founder of Schwartz Law
800-745-1755
moc.c1532171495pwalz1532171495trawh1532171495cs@SS1532171495E1532171495


what our clients say about us

Testimonials

  • We as a society are not prepared to deal with catastrophic illness, and although I was smart enough to have taken out a Long-term Disability policy in my thirties, the

    Long Term Disability Client – California
  • Desperate and devastated with everything to lose, I put my life in the hands of Evan and Michail on faith. In my heart I always believed they would deliver, and

    Lawyer – Oklahoma
  • During the most trying part of my life, Schwartz Law’s attorneys were fighting for my life. I was physically just barely up on my own two feet, with a diagnosis

    Long Term Care Client – New York
  • A company made an error in how they sold me my long-term disability insurance policy and they offered me a lump sum settlement. I did not fully understand the offer

    Physician–New York
  • My claim was denied by my insurance company. My medical condition wasn’t understood by my physicians. My first attorney gave me terrible advice. My family faced financial ruin without the

    Physician – New York

Latest News

Send us a message

Manhattan Offices

The Chanin Building, 122 East 42nd Street, Suite 725, New York, New York 10168

Toll Free: (800) 745-1755
Phone: (212) 608-5445

Garden City Office

666 Old Country Road, Ninth Floor, Garden City, New York 11530

Toll Free: (800) 745-1755
Phone: (516) 745-1122
Fax: (516) 745-0844