Insurance is your safety net. It is an agreement between you and your insurance company that guarantees that if something should happen to you, the agreed safety net will be provided. Insurance companies have the right to investigate the legitimacy of claims. However, Texas insurance companies cannot reject legitimate claims, distort insurance terms, or engage in other specific "bad deeds."
In some cases, an insurance claim can be simple. For example, if your windshield breaks and you have car insurance for this type of damage, you can make a phone call, explain the situation and have a professional company install a new windshield in a few days, sometimes the same day. However, many other types of insurance claims are full of difficulties that may require the help of an experienced insurance lawyer.
People buy insurance to protect themselves from the unexpected. Things like accidents, property damage and natural disasters. Unfortunately, it is not uncommon for insurance companies to underestimate, underpay, delay or even completely deny payment of a claim without proper justification or warning. For this reason, it is important that policyholders understand their legally protected rights.
In Texas, insurance companies owe a large amount of information to their policyholders, ensuring that claims are immediately adjusted and settled in a fair manner. An insurance is an agreement between the insurance company and the policyholder, and both parties must meet the conditions. If an insurance company violates the terms of its insurance, it is liable for breach of contract. Due to the uneven negotiation relationship between a policyholder and an insurance company, Texas law interprets all ambiguities in the insurance in favor of the insured. 1
The reason why insurance companies are so carefully regulated is the inherent advantage they have over their insured which is dependent on the coverage they paid for. The Supreme Court of Texas first upheld an action against insurance companies for improper handling of an insurance claim in 1987. The court noted that due to the unequal bargaining power between insured and insurers, "unscrupulous insurance companies [could] use their insured" accidents to negotiate redemption or negotiation. receivables ”and that“ without such action, insurers may arbitrarily deny coverage and delay payment of a receivable with no more interest than interest on the amount due. 3  In Texas, there are two separate laws that punish insurance companies for acting in bad faith. The first is a generally understood union of good faith that requires an insurance company to treat you honestly and fairly. When someone makes a claim with their insurance company, Texas law requires the insurance company to follow specific guidelines in its treatment and handling of the claim. The insurance company has an obligation to act in good faith and fairly with its policyholder, which means that it must evaluate the claim fairly and not deny or delay payment when the liability is reasonably clear. 4
Texas Insurance Code § 542 sets specific time limits for when an insurance company governed by this chapter must take certain action after receiving a notice of a claim.
Q: Do my insurance company have to answer me when I have submitted a claim?
A: Yes, under Texas law, an insurance company is required to respond to a claim that is filed.
- Section 542.055 of the Texas Statute provides that an insurance company must do the following within 15 days in order to receive a notice of a claim from an applicant:
- Confirm receipt of claim.
- Start investigating the claim.
- Request all information from the policyholder that the insurer reasonably believes will be needed in the investigation.
An insurer's failure to acknowledge that they have received your claim is a violation of the Charter. However, the statutory requirements do not end there. An insurance company must also notify you if your claim has been approved.
In most scenarios listed in section 542.056 of the Texas Statutes,
- The insurer must notify the applicant in writing within 15 working days after receiving all items requested in the investigation if the claim is approved or denied (30 days on a "reasonable basis" by the insurer that the loss occurred from arson) and if the claim is denied, state the reason for the refusal in the notice. 6
Q: When I have submitted a claim and the insurance company has to pay, when should I get paid?
A: If an insurance company notifies you that they will pay a claim or part of a claim, they must do so within a certain time. Under Texas law, they can not continue to delay payment.
Section 542.057 of the Texas Statute states that:
- An insurer must generally pay the approved claim "no later than the fifth business day after the notice is made." In fact, if an insurer does not do so, you may be entitled to damages. 7
In short, insurance companies have an obligation to immediately complete their investigations, make claims and pay claims. In most cases, the insurance company's decision should be made within 60 days. Failure to meet the technical requirements of Ch. 542 "Quick Payment" law can entitle you to law firms and other penalties.
Q: Is there any way I can speed up the process to get my claim resolved faster? . fast as possible.
When your property is damaged, try to compile as much information as possible to provide the insurance company. Having witness statements, claims and evidence of loss forms completed and ready can help speed up the process.
Q: Why is it beneficial to contact a lawyer to help me with my claim?  A: If you are dealing with an insurance company that has delayed answering or paying your claim, you may feel that there is nothing you can do. However, this is not the case. Know that you have rights, and there are steps you can take. Do not let an insurance company continue to delay your claims process. A lawyer can help protect your rights and fight for you.
If you suspect that your insurance company is acting in bad faith, be sure to document all conversations with your insurance company. Make sure you save all correspondence with your insurance company and, whenever possible, request that your insurance company communicate with you via letter rather than telephone. When you meet the lawyer for the first time, be sure to bring a folder with all the documentation you have saved.
If you think your insurance company is acting unreasonably, you may need to hire a lawyer to get the compensation you deserve. As soon as possible, find a lawyer who has experience in claiming damages from first parties, attorneys at Merlin Law Group devote their entire practice to first-party non-life insurance. We understand the tactics used by insurance companies to deny legitimate claims and have a proven track record of securing the earned compensation for our customers.
1 Nat’l. Union Fire Ins. Co. of Pittsburgh, PA v Hudson Energy Co., Inc. 811 S.W.2d 552 (Tex. 1991).
2 Earnest Martin Jr. and Michael Stoner. How non-contractual damages can protect insured persons from obstina insurance companies . Texas Attorney, June 1, 2018.
3 Arnold v. National County Mutual Fire Ins. Co. 725 S.W.2d 165 (Tex. 1987).
4 Tex. Mut. Ins. v. Ruttiger 381 SW 3d 430, 446 (Tex. 2012).
5 Tex. Ins. Code §542.055
6 Tex. Ins. Code §542.056
7 Tex. Ins. Code §542.057