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What is a Breach of Insurance Contract?

a rolled up insurance policy

What Is Breach Of Insurance Contract?

An insurance contract provides protection against damages that may occur.  It is financial support by the company acting as an insurer.  The insurance company, once committed, is bound by law to provide the insured with help, assistance and support at the time of need.  If the insured had an accident, the insurance company must provide all the services and coverage outlined in the contract signed by both parties.  After the insured party starts making payments as per the policy guidelines both parties are bound by law to honor the contract.  If the insurance company or the insured does not fulfill all the terms and conditions of the contract, a breach of contract takes place.

How a Breach of Insurance Contract takes place?

An insurer or insured can breach the insurance contract in many ways.  For example, if the insurance company denies the rights of the insured it will be consider a breach of contract.  If the insurance company only pays for part of an insurance claim after a storm, hail, tornado or other weather event, then the insurance company has breached the contract.

Following are some typical ways in which breach of contract takes place:

  1. If the insurance company unreasonably denies the claim.
  2. If the insurance company fails to provide assistance.
  3. If the insurance company delays in paying an insurance claim.
  4. If the insurance company misinterprets the contract.
  5. If the insurance company denies the benefits mentioned in the contract.
  6. If the Insurance company denies the claim without proper investigation.

What is Insurance Bad Faith?

A breach of insurance contract can also make an insurance company liable for bad faith.  The insurance company owes the insured a duty of good faith and fair dealing.  Often, an insurance will act in bad faith in failing to pay the claim. 

We, at the Law Office of Jim Zadeh, P.C., have helped people of Texas with issues related to all types of insurance.  For any related queries call us at 817-335-5100 or toll free 888-713-5418.  You will be provided with a free and confidential consultation.

Jim M. Zadeh
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Attorney at Law