INSURANCE BAD FAITH DEMAND LETTER – TEXAS
To: [Insurance Company Name, Claims Department Address]
From: [Insured/Claimant Name, via Counsel if applicable]
Date: [DATE]
Claim Number: [CLAIM NUMBER]
Policy Number: [POLICY NUMBER]
Insured: [INSURED NAME]
Date of Loss: [DATE OF LOSS]
Claim Type: [First-Party / UM-UIM / Property]
1. INTRODUCTION
This letter demands immediate payment. Failure to pay triggers 18% penalty interest under Texas law.
2. FACTUAL BACKGROUND
- Date of Loss: [DATE] — [describe loss]
- Coverage: [$LIMITS]
- Status: [Unpaid / Underpaid / Denied]
3. LEGAL BASIS – TEXAS BAD FAITH
Prompt Payment of Claims (Tex. Ins. Code § 542.060)
Texas law requires insurers to pay claims promptly. Failure to do so results in:
- 18% annual penalty interest; plus
- Reasonable attorney's fees.
Unfair Settlement Practices (Tex. Ins. Code Chapter 541)
Texas prohibits unfair claims practices including:
- Misrepresenting policy provisions;
- Failing to attempt good faith settlement;
- Failing to affirm or deny coverage within reasonable time.
Common Law Bad Faith
Texas recognizes common law bad faith – insurer must not unreasonably deny or delay payment when liability is reasonably clear. Universe Life Ins. Co. v. Giles, 950 S.W.2d 48 (Tex. 1997).
4. DAMAGES
- Policy benefits: [$AMOUNT]
- 18% penalty interest (from date claim should have been paid)
- Actual damages under Chapter 541 (treble for knowing violations)
- Attorney's fees
- Interest and costs
5. DEADLINE
Payment due by: [DATE – 30 days]
Signed:
[Name / Attorney]
[Contact Information]