Everything About Insurance Bad Faith

Your insurance company collected every premium you ever paid. Now they're pretending you don't exist.

That's insurance bad faith — and it's more common than the industry will ever admit. When insurers deny valid claims, drag out payments, or make lowball offers designed to exploit your desperation, they're not making honest mistakes. They're making calculated business decisions, betting that you won't have the knowledge or the resources to fight back.

Here's what you need to know:

What insurance bad faith is and how Texas law defines it
The most common bad faith tactics insurers use against policyholders
Your rights under the Texas Insurance Code
What bad faith compensation looks like — including damages beyond your original claim
How to choose the right attorney to take on a billion-dollar insurer
What not to say to an insurance adjuster
When to sue your insurance company — and how

At Thiessen Law Firm, we built our entire practice around fighting giants. Mark Thiessen knows exactly how insurance companies operate — not just from the outside, but from inside the machine itself. That insider knowledge is often the difference between walking away with a lowball settlement and getting every dollar you're owed.

If an insurer has already wronged you, don't wait. Call our Houston insurance lawyers at (346) 999-5673 for a free consultation — because the giants are counting on you not knowing your rights, and we're counting on proving them wrong.

“They fought for me and got me an incredible 6-figure settlement. When Jesenia told me the final number, I literally cried happy tears. This law firm isn’t just good, they’re legendary. They’ve officially earned the title of ‘my attorneys for life.’”

— Ashley B

What is bad faith in insurance?

Insurance companies don't just sell policies — they make promises. Every premium you pay is a contract: when something goes wrong, your insurer will be there. Bad faith is what happens when they break that promise on purpose.

Under Texas law, insurers have a legal duty to deal honestly and fairly with every policyholder. When they fall short of that duty — not by accident, but by design — they've crossed the line from a coverage dispute into something the law takes very seriously. A bad faith insurance claim in Texas isn't just about a disagreement over dollars. It's about holding a company legally accountable for deliberately cheating the people it was paid to protect.

The key word is "deliberately." Insurance companies make mistakes like any business, and not every denied claim is bad faith. What separates bad faith from a simple dispute is intent and pattern — when an insurer consistently delays, misrepresents, or denies claims without legitimate justification, the law recognizes that as something far worse than an error.

Your rights under the Texas Insurance Code

Texas bad faith insurance law is primarily governed by two chapters of the Texas Insurance Code, and together they give policyholders some of the most powerful legal protections in the country.

Chapter 541: The Unfair Claims Settlement Practices Act

This is the cornerstone of bad faith litigation in Texas. Chapter 541 prohibits insurers from engaging in deceptive or unfair practices, including misrepresenting policy terms, refusing to settle claims promptly when liability is clear, and making unreasonably low settlement offers. If an insurer violates Chapter 541, you're entitled to pursue actual damages, court costs, and attorney's fees — and in cases of knowing or intentional violations, up to three times your actual damages.

Chapter 542: The Prompt Payment of Claims Act

This chapter puts hard deadlines on insurers. Once a claim is filed, your insurer must acknowledge it within 15 days, accept or reject it within 15 business days of receiving all requested information, and pay approved claims within 5 business days. Miss those deadlines without justification? The insurer owes you 18% annual interest on top of your claim amount, plus attorney's fees.

Keep in mind, Texas imposes a two-year statute of limitations on bad faith claims. From the date of the violation, you have two years to file — and that clock doesn't pause while you're negotiating with your insurer. Waiting too long doesn't just hurt your case. It can end it entirely.

Knowing your rights is the first step. Enforcing them is where We Fight Giants comes in.

What are bad faith tactics used by insurance companies?

Insurance companies don't act in bad faith by accident. Every delay, every denial, every lowball offer is a calculated move made by teams of analysts, adjusters, and in-house attorneys whose entire job is to find reasons to pay you less. Understanding their playbook is the first step to making sure it doesn't work on you.

Here are the most common bad faith tactics insurers use against Texas policyholders:

Denying valid claims without investigation
Delaying payment without justification
Making unreasonably low settlement offers
Misrepresenting your policy terms
Disputing the severity of your injuries
Rushing you to settle before you know your damages
Using pressure tactics to force acceptance
Ignoring court-ordered judgments

What makes these tactics so dangerous is how ordinary they can look from the outside. A delay feels like bureaucracy. A lowball offer feels like a starting point for negotiation. A denial feels like a coverage question. Insurance companies count on policyholders not recognizing bad faith for what it actually is — an intentional strategy designed to protect their bottom line at your expense.

Learn more: Can you sue an insurance company?

What kind of compensation can you get for a bad faith claim?

Texas law doesn't just give you the right to recover what you were owed from the start. It gives you the right to hold the insurer accountable for how they treated you along the way.

Here's what a successful bad faith claim in Texas can put on the table:

Your original claim value: The full amount your policy entitled you to from the beginning, including all economic losses the insurer tried to minimize or deny
Medical expenses: All past and future costs related to your injuries, from emergency treatment and surgery to ongoing rehabilitation and prescription medications
Lost wages and lost earning capacity: Compensation for income you've already lost and income you may never be able to earn again because of your injuries.
Pain and suffering damages in Texas: Non-economic damages that account for physical pain, mental anguish, emotional distress, and the broader impact your injuries have had on your quality of life.
Statutory damages: Under Chapter 541 of the Texas Insurance Code, knowing or intentional bad faith violations can entitle you to up to three times your actual damages.
18% annual interest: If your insurer violated the Prompt Payment of Claims Act under Chapter 542, they owe you 18% annual interest on your claim amount for every day they were late.
Attorney's fees and court costs: Texas law allows you to recover these directly from the insurer in a successful bad faith case.
Punitive damages: In cases of particularly egregious or intentional misconduct, courts can award additional damages designed to punish the insurer and deter future bad faith behavior.

Is it worth suing an insurance company?

In most bad faith cases, absolutely — and the numbers above are exactly why.

The moment a serious litigation team like We Fight Giants gets involved, the entire dynamic shifts. And that shift happens because insurance company counsel knows we don't bluff, we don't settle for less than what our clients are owed, and we are fully prepared to put their bad faith conduct in front of a Texas jury if that's what it takes.

How to choose the right attorney to take on a billion-dollar insurer

What kind of lawyer helps with insurance? Insurance litigation is a specialized fight — and when you're up against a billion-dollar company with an army of in-house attorneys, adjusters, and analysts, the attorney you choose can be the difference between a lowball settlement and the full compensation Texas law entitles you to.

Here's what to look for:

Insider knowledge of how insurers operate: The most effective bad faith attorneys don't just understand the law — they understand how insurance companies think, budget, and strategize from the inside. That knowledge is impossible to replicate from the outside and invaluable in litigation.
A genuine trial record: Any attorney can threaten to go to court. Very few actually do. Insurers know the difference between a firm that bluffs and a firm that shows up — and they negotiate accordingly. You need an attorney with real verdicts against real opponents.
Deep command of the Texas Insurance Code: Bad faith cases are built on specific statutes. Your attorney needs to know Chapters 541 and 542 inside and out, and understand exactly how Texas courts have interpreted and applied them.
Transparent, consistent communication: You should never be left wondering what's happening with your case. The right attorney treats you like a person, not a file number, and makes themselves accessible throughout the entire process.
The resources to match the opposition: Major insurers have unlimited legal budgets. Your attorney needs the infrastructure — expert witnesses, investigators, medical specialists, financial analysts — to build a case they can't dismiss or outspend.

At We Fight Giants, every one of these qualities is built into how we practice. Mike "The Insider" Pita spent years working inside major insurance companies learning exactly how they evaluate claims and pressure policyholders — and now he uses that knowledge against them. Mark Thiessen has tried over 250 jury trials across Texas and built a reputation that insurance company counsel take seriously the moment his name appears on a filing.

When you hire Thiessen Law Firm, you're not just hiring attorneys. You're hiring the people who know the giants best and have spent their careers beating them.

What not to say to an insurance adjuster

Insurance adjusters are not neutral parties. From the moment they introduce themselves on the phone, their job is to build a record that justifies paying you as little as possible. Before you pick up that phone, know exactly what to avoid.

What not to say	Why it’s dangerous
"I think I'm okay" or "It's not that bad"	Downplaying your condition early gives the insurer documentation to dispute your injury severity later, even if your symptoms worsen significantly
"Maybe I could have done something differently"	Blaming yourself in any way can be used to inflate your percentage of fault under Texas comparative negligence law, directly cutting into your recovery
"I'm still figuring out whether to get a lawyer"	Tells the adjuster you're navigating this alone, which immediately shifts the power dynamic in their favor
"I just want this behind me"	Reveals urgency that adjusters are specifically trained to exploit — expect a lowball offer to follow almost immediately
"Let me walk you through everything that happened"	An unrehearsed, detailed account given without legal counsel can be picked apart later if any detail shifts as your case develops
"I've had issues with that part of my body before"	Pre-existing condition disclosures become ammunition for arguments that your current injuries predate the incident entirely
"That number might work"	Even casual, exploratory language around settlement figures can be framed as informal acceptance or willingness to resolve below your claim's value

The single best thing you can do to protect yourself after an incident is limit what you say until you have an attorney in your corner. You are under no legal obligation to provide a recorded statement to the other party's insurer, and anything you share with your own carrier should be discussed with counsel beforehand.

How to prove bad faith by an insurance company

Proving bad faith isn't just about showing that your insurer made the wrong call. It requires demonstrating that they made it deliberately — that the denial, delay, or lowball offer wasn't an honest mistake but a calculated decision made without a reasonable basis.

Here's what building a strong bad faith case actually looks like:

Document every symptom and injury from day one

Insurance companies will look for any opportunity to argue that your injuries are exaggerated, unrelated to the incident, or developed after the fact. Comprehensive, contemporaneous medical records are your first line of defense.

Whether you're dealing with neck pain after a car accident, chest pain following a collision that wasn't immediately evaluated, or emotional distress that developed in the weeks after a traumatic incident, every symptom needs to be documented by a medical professional as early as possible. Gaps in treatment and delayed diagnoses are two of the most common tools insurers use to discredit legitimate claims.

Build a paper trail of every insurer interaction

Every phone call, every letter, every email, every denial notice — save all of it. The timeline of how your insurer handled your claim is often the most powerful evidence in a bad faith case.

Delays that stretch past the legal deadlines established under Chapter 542, denial letters that misrepresent your policy terms, and settlement offers made before any real investigation was conducted all tell a story that an experienced bad faith attorney knows exactly how to tell in court.

Preserve the denial and demand a written explanation

If your claim was denied, you are entitled to a written explanation. That explanation — and the reasoning behind it — becomes a critical piece of evidence. If the insurer cited a policy exclusion that doesn't actually apply, mischaracterized the facts of your claim, or denied without conducting a genuine investigation, that written denial is often where a bad faith case begins.

Get independent expert opinions

Insurance companies retain their own physicians, engineers, and analysts to produce findings that support their position. You need independent experts who can counter those findings with objective evidence. Medical specialists who can document the full scope and long-term trajectory of your injuries, accident reconstruction experts who can establish liability clearly, and financial analysts who can quantify every category of your damages all play a role in building a case that an insurer — and a jury — cannot dismiss.

Work with an attorney who knows what to look for

Bad faith isn't always obvious. Sometimes it's buried in the timeline of a claims file, in the internal communications of an adjuster, or in the pattern of how a particular insurer handles certain types of claims.

An experienced bad faith attorney knows where to look, what to subpoena, and how to turn what an insurer thought was a clean paper trail into damning evidence of deliberate misconduct.

The insurance company made their move. Now it's your turn.

You filed your claim in good faith. You held up your end of the contract. And instead of honoring their obligations, your insurance company delayed, denied, or offered you a fraction of what you're actually owed — betting that you'd be too overwhelmed, too exhausted, or too intimidated to push back.

That bet is exactly what insurance bad faith in Texas is. And it's exactly what we exist to fight.

Mark Thiessen has tried over 250 jury trials across Texas. Mike "The Insider" Pita spent years inside the insurance industry learning the very playbook being used against you. Together, they've built a team that knows this fight from every angle — and has spent their careers winning it.

If an insurer has treated you unfairly, don't wait. Call Thiessen Law Firm at (346) 999-5673 or contact us online for a free, confidential consultation. The giants are counting on you giving up. We're counting on proving them wrong.

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