(713) 352-7975

Insurance Agent & Breach of Fiduciary Duty

When Insurance Agents Breach Fiduciary Duties

10 Reasons to Never Trust an Insurance Company | Houston Personal Injury LawyerBreach of fiduciary duties can compromise legitimate claims, derailing efforts to recover from accidents and other events caused by negligence. Nevertheless, Texas law does not outline formal fiduciary duties that insurance agents have to insured individuals, and bringing these claims can be challenging in the Lone Star State.

Still, that does not totally negate insurance agents’ fiduciary duties, nor does it grant them carte blanche to act however they want with insured individuals and their claims.

Instead, there are some basic fiduciary duties that agents generally have to honor in course of processing claims and dealing with insured individuals. If agents breach these fiduciary duties, they can face legal action and potential penalties.

Examples of Insurance Agent Breach of Fiduciary Duties

A fiduciary duty between an insurance agent and a customer is a relationship based on trust and good faith, requiring the agent to act in the best interest of the customer. Consequently, a standard of care is established between these two parties, and that should be maintained, regardless of personal interests.

Denied Claims - Breach of Fiduciary Duty - Insurance LawyerInsurance agents can breach the fiduciary duties and fail to provide the necessary standard of care whenever:

  • An agent is negligent in his or her interactions with an insured individual.
  • Valid insurance claims are intentionally and wrongfully denied.
  • Misleading or false information is used to manipulate customers.
  • An agent engages in post-claim underwriting.

If you’re dealing with an insurance agent and you suspect any of these actions is involved with your claim, consult an experienced insurance lawyer as soon as you can.

An attorney can explain your rights and legal options while advising you on the best options for protecting your interests and potential claim as you move forward.

Bad Faith Insurance Claims & DTPA Violations

Along with breach of fiduciary duty, insurance agents have been known to engage in bad faith practices, insurance code violations, and violations of the Texas Deceptive Trade Practices Consumer Protection Act (DTPA).

These acts can take several forms in the real world, including (but not limited to):

  • Misrepresenting the coverage or policy limits and exclusions
  • Cutting corners during claim investigations to manipulate the findings
  • Failing to disclose essential information about a claim or policy
  • Canceling policies without reason after claims have been filed

With so many ways to potentially take advantage of claimants, insurers can get the upper hand in claims using various strategies, manipulating the process to try to limit or avoid making payouts.

That’s why an experienced attorney can be so essential when it’s time to:

  • Identify the nature of insurance adjuster’s unethical or even illegal actions
  • Determine what type of legal violations have taken place
  • Point out the available remedies and how to initiate legal action
  • Compile the evidence needed to seek full, fair compensation

Bad faith practices or DTPA violations when dealing with insurance companies can come as a huge surprise, particularly when claimants have been diligently paying their premiums, filing minimal claims in the past.

When that happens, it’s time to seek experienced representation from an attorney who knows how to stand up to insurers and neutralize their tactics.