If an insurance company has to act in good faith how does the insurance company for the people that caused the accident get away with treating people so badly?
In Texas, parties to a contract have a duty of good faith and fair dealing in the performance of the contract. Until the 1990's this duty applied to not only the parties to the contract but also to the "intended beneficiaries" of the contract. In the past, if you were injured by someone else's negligence and they had insurance covering their conduct then you were considered to be an intended beneficiary of the contract and the insurance company and their adjusters were obligated to act in good faith in handling the matter.
If the insurance adjusters got out of line then they could be sued for "bad faith" which is really just the breach of the duty of good faith and fair dealing. Using the bad faith laws the personal injury lawyers did a good job of policing the insurance companies and making them behave.
However, over the last 15 years the Texas courts have become increasingly "insurance friendly" and during the 1990's the duty of an insurance company to conduct themselves in good faith while handling claims against their negligent insureds was eliminated.
At this point if you have been hurt by someone else's negligence and their insurance company is treating you unfairly then your choice is either to just accept the abuse or to hire a lawyer that will file a lawsuit.
Many lawyers do not go to trial and the insurance companies take this into account when settling their client's claims. My law firm files lawsuits and goes to trial when necessary.