When an insurance company agrees to insure a person's home by way of monetary premiums, the insurer and insured enter into a contract. The insurance company sets forth rules in their contract, but is expected to cover property damage claims according to the insurance policy.
When an insurance company intentionally denies or does not cover a residential insurance claim that should be paid, the insurer may have breached the contract by not acting in good faith and fair dealings. When this happens, the insured may pursue punitive damages under tort law, claiming that the insurer's conduct was deliberate.
Typically, punitive damages are not awarded in contract dispute cases, but insurance bad faith cases are an exception to this rule. Because punitive damages are paid in excess of the insurance claim and can get out of hand, punitive damages are typically limited to negligence caused by economic reasons, negligence motivated by fraud and gross negligent intent.
This means that if you sue an insurance company for punitive damages, tort law allows you to recover losses for your emotional distress, pain and suffering, unearned income due to missed time away from work, and more. Of course, all of these damages are based on how much you suffered due to the bad actions of the insurance company. If a judge and jury award punitive damages, they are punishing the insurer for their wrongdoings and sending a message to the insurance company to not act this way to any other policyholder again.
To find out if you can pursue punitive damages for your homeowner's insurance claim, call an experienced Texas insurance claim attorney at the Voss Law Firm at 888-614-7730 for a free legal consultation today.
You can also get our FREE book by filing out a form on our website. Get your copy of Disputes With Your Insurance Company - What All Consumers Need to Know.
Pursuing Punitive Damages in Insurance Bad Faith Cases
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