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]