Texas’s Homeowner Insurance Crisis and Bad Faith Actions
Texas’s Homeowner Insurance Crisis and Bad Faith Actions
Extreme weather carries a host of negative side effects. For Texas homeowners, the cost of extreme weather is hitting them in their wallets in the form of higher premiums and less comprehensive policies.
Between 2018 and 2022, Texas led the United States in damage from weather and climate events. The state tallied an eye-watering $375 billion in damages.
These years are part of a larger trend. In the three decades before 2010, Texas had 50 weather and climate disasters. Since 2010, Texas has contended with 94 weather events totaling over $1 billion in damages.
Everything may be bigger in Texas, but in this case, it isn’t a good thing.
Changes to Insurance
The cost of these weather and climate events can be seen in homeowner policies. In 2023, rates rose an average of 15 percent. Some homeowners switched to less comprehensive plans.
Unlike California and Florida, where several companies have discontinued homeowners’ policies, Texas insurers are still covering homes in the Lone Star State. This coverage, however, is different than before, with insurers pushing to raise premiums while offering less coverage.
Even when a homeowner keeps an existing plan, they may find that their policy has numerous exclusions or high deductibles. Insurers may deny a claim only for a homeowner to have an issue several months later, when it’s too late to file.
Bad Faith
Sometimes, when policyholders make a claim, insurers may continually delay, find excuses not to pay, or pay less than what they should. In these situations, the insurers are said to be acting in bad faith.
Chapter 541 of the Texas Insurance Code defines bad faith actions by insurers. Some of the situations where an insurer may be acting in bad faith:
- They misrepresent the terms or benefits of a policy
- They don’t act in good faith to resolve a settlement in a timely, fair, and equitable manner
- They deny a claim without a reasonable investigation
- They don’t explain why they denied a claim
- They don’t act within a reasonable period
Policyholders may also make a bad faith claim under the common law. In these situations, policyholders must show that a company denied or delayed a claim despite evidence of reasonable, clear liability.
Hire a Skilled Property Legal Team That Knows Texas
While insurance has never been simple, it used to be easier for homeowners to decide on a policy, pay their premiums, and make a claim if and when needed. Unfortunately, weather and climate events have made insurance less stable, resulting in higher costs and lower coverage.
If you believe an insurer has denied a legitimate claim or otherwise acted in bad faith, a skilled Texas property law attorney can help. The attorneys at Manfred Law help Texas property owners resolve property issues. Call us at 713-547-5460 or contact us online to schedule your consultation.
