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Texas Strictly Regulates Insurance Company Behavior

  • The Texas Winter Storm of 2021 will likely go down as the costliest winter event in Texas history.

  • As a result, you may have to file an insurance claim to get damage repaired at your commercial property.

  • Texas law strictly governs the behavior of your insurance company. If it does not follow the rules, Bukowski Law Firm can help.


We are now two weeks after the start of the great Texas winter freeze 2021. But it is still very much on the mind of many of us. In this week’s article, therefore, we are following up on what we talked about last week – what to do about damages to your property. Specifically, how to get your insurance company to pay you what they are required to do.


Status of the Storm


I don’t have to tell you this if you are a Texan, but the damage from the Texas winter storm is huge. Many estimates believe this will be the costliest winter event in Texas history.


And, of course, Texas wasn’t the only place to suffer. I have seen estimates that there will be 750,000 claims filed nationwide – with the majority of those being in Texas. The damages could total up to $18 billion – more than six times the normal size of insurance claims filed in a winter in the United States.


As a result, you may notice – as I have – that your insurance company’s adjuster may be slow to get out to your property. As of Friday, I still have not heard from mine. On some level, you may think that this is understandable given all of the claims. But it does not help you get your water back or damage repaired. And it does not release the insurance company from its obligations under the Texas Insurance Code.


Obligations Under the Code


Under the Texas Insurance Code, an insurer may not engage in unfair settlement claim practices. What does this mean? Specifically, any of the following acts constitute unfair practices:


  • Knowingly misrepresenting to a claimant pertinent facts or policy provisions;

  • Failing to acknowledge with reasonable promptness communications relating to a claim;

  • Failing to adopt and implement reasonable standards for the prompt investigation of claims;

  • Not attempting in good faith to effect a prompt, fair, and equitable settlement of a claim;

  • Compelling a policyholder to institute a suit to recover an amount due under a policy by offering substantially less than the amount ultimately recovered in a suit;

  • Failure to keep a record of complaints against it; or

  • Committing another act the commissioner determines by rule constitutes an unfair claim settlement practice.

In addition, insurers in Texas are required to promptly handle and pay claims. This generally means that, within 15 days of notice of a claim, the insurer must:

  • Acknowledge receipt of the claim;

  • Start an investigation; and

  • Request from the client all items, statements, and forms the insurer reasonably believes will be required.

Once the insurer receives the items from a client, it then has 15 days to accept or reject the claim.


So, as you can see, Texas highly regulates how an insurance company treats its clients. Overall, it has to treat you fairly and pay the claims it owes. And it must do that promptly.


Of course, there are many tricks that an insurance company can use to drag out this process. We have seen insurance companies repeatedly offer to underpay a claim in hopes that you will settle. In addition, it will continue to ask for more and more unnecessary information as a way to continue to try to delay its 15 day trigger discussed above.


Obviously not all insurance companies perform these nefarious tricks. And I hope your’s does not. But its something you should be aware of. And if your insurance company engages in these shenanigans, please do not hesitate to call us at 512-614-0335 and let us help you deal with it.

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