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Damages Available in a Bad Faith Insurance Claims in Texas 

Available damages for Texas Bad Faith Insurance Claims

Available damages for Texas Bad Faith Insurance Claims

Bad faith insurance claims can result in various types of damages for plaintiffs. These damages can vary from claim to claim, depending on factors like (but not limited to) the nature of:

  • The original claim filed with the insurance company
  • The act(s) of bad faith committed by the insurer
  • The losses the policyholder suffered due to the bad faith practice(s).

The following reveals more about the available damages allowed by Texas law for property insurance claims that have been compromised by bad faith practices. Whenever you are ready to discover more about how you can level the playing field and protect your rights when dealing with insurers, contact the Amaro Law Firm.

Our lawyers specialize in handling bad faith claims and supporting contractors’ revenue streams. Having successfully handled thousands of claims since Hurricane Ike, we are highly familiar with the tactics insurers use to deny, underpay or delay insurance claims – and we know how to effectively challenge these tactics in any legal setting.

Fighting an insurer over a hail damage claim?

Compensatory Damages for Bad Faith Insurance Claims

Compensatory damages refer to the awards granted to cover the losses suffered as a result of:

  • A covered disaster or event (i.e., the “actual” damages to the covered property).
  • The acts of bad faith.

For property damage claims – like windstorm or hail damage claims, compensatory damages can include (and may not be limited to) awards to cover the costs of:

  • Contractor estimates
  • Construction labor and material costs
  • Relocation costs (for property owners)
  • Future repairs (when related to the original damage)
  • Lost wages.

In addition to these economic damages, Texas laws1 allow recovery for attorney fees. This means that an insurance company acted in bad faith, they are legally responsible to pay for:

  • The repairs necessary to restore the property damage (caused by the covered event)
  • The contractor’s fees, including overhead expenses
  • Reasonable and necessary attorney’s fees (related to resolving the bad faith claim).

Punitive Damages for Bad Faith Insurance Claims

Punitive damages can also be available for some bad faith claims practices in Texas. Also referred to as exemplary damages, punitive damages are meant to punish an insurance company for the bad faith conduct (rather than repay the insured for the losses (s)he sustained).

Though rare, punitive damages can:

  • Be awarded when an especially malicious, fraudulent, negligent or criminal act is associated with a particular claim or when an insurance company has a history of acting in bad faith
  • Significantly increase the value of a claim
  • Serve as powerful leverage for getting insurance companies to fairly settle claims – If an insurer knows there’s a possibility of punitive damages being awarded by a jury, it can be far more willing to settle pretrial (to try to avoid paying out higher jury awards that could include punitive damages).

It’s important to understand that Texas law does place a cap on the available punitive damages. Specifically, Texas law dictates that:

Exemplary damages awarded against a defendant may not exceed an amount equal to the greater of:

  1. Two times the amount of economic damages plus an amount equal to any noneconomic damages found by the jury, not to exceed $750,000; or
  2. $200,000.

An attorney can explain how this cap may apply to your potential claim and what you need to do position your bad faith insurance claim for success.

Find Out More about Your Potential Claim: Contact a Houston Hail Damage Claim Lawyer at the Amaro Law Firm

If you believe your property or hail damage claim has been subjected to insurance bad faith, contact a Houston hail damage claim lawyer at the Amaro Law Firm.

Our lawyers get hail and other property damage claims quickly paid in full using the knowledge and experience from successfully resolving hundreds of claims per year. We have extensive experience prevailing in commercial and residential claims on behalf of contractors, public adjusters, and policyholders who are unable to resolve property damage claims.

Call (713) 352-7975 or email us to set up a free consultation.

We know exactly how the insurance business works, what strategies insurers employ and how to effectively combat them. Our tireless dedication to protecting and advancing our clients’ rights has earned us 5-star ratings on Google and Facebook.


1: Texas Insurance Code and the Texas Deceptive Trade Practices Act (DTPA)