Potential Recovery In Insurance Claims

Crowley insurance lawyers should be able to discuss with clients the potential recovery when an insurance company wrongfully denies a claim.
One element of recovery is the actual damage. In other words the actual amount due under an insurance policy. An example would be a life insurance policy with a $100,000.00 benefit to beneficiary. If that claim is denied and it is found to be a wrongful denial, then the claimant / beneficiary is entitled to the actual damages of $100,000.00.
Another potential recovery when a trier of fact, whether that be a Judge or Jury, finds that the insurance company acted “knowingly” the trier of fact can award not more than three times the amount of actual damages. This relief is found the Section 541.152 of the Texas Insurance Code. This is commonly referred to as “treble damages.” This term originated from the days when the Texas Deceptive Trade Practices Act (DTPA) mandated an automatic tripling of the injured parties’ damages. The current state of the law states this trebling must accompany a finding of “knowing” conduct. It is important to know that the trebling is not an automatic number. For example a trier of fact could find the insurance company “knowingly” committed a wrong but then choose to not award any amount of extra damages. It is entirely up to their discretion according a 1994, Texas Supreme Court case styled, Celtic Life Insurance Company v. Coats.
“Knowingly” means actual awareness of the falsity, unfairness, or deceptiveness of the act or practice on which a claim for damages under Subchapter D is based. Actual awareness may be inferred if objective manifestations indicate that a person acted with actual awareness. This is the definition from the Texas Insurance Code, Section 541.002(1).
Another potential recovery for an insured who prevails in a lawsuit is the recovery of attorney fees. This is not automatic, nor is the amount whimsical. The Texas Supreme Court in a 1997 opinion, listed eight factors that must be considered in compensation for an award of attorney fees. These factors are:
1) the time and labor required, the novelty and difficulty of the questions involved, and the skill required to perform the legal service properly;
2) the likelihood that the acceptance of the particular employment will preclude other employment by the lawyer;
3) the fee customarily charged in the locality for similar legal services;
4) the amount involved and the results obtained;
5) the time limitations imposed by the client or by the circumstances;
6) the nature and length of the professional relationship with the client;
7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and 8) whether the fee is fixed or contingent on results obtained or uncertainty of collection before the legal services have been rendered.
The Texas Insurance Code also allows for injunctive relief and any other relief the court deems proper under the circumstances.