Insurance represents a contract made between you and your insurance company, assuring that, if anything catastrophically wrong befalls you, your insurance company will step in to provide a financial safety net. This contract gives your insurance company the right to investigate your claims and to ensure they are legitimate. However, the Texas Insurance Code forbids these companies from rejecting valid claims and from misrepresenting the terms of their policies.
Of course, some insurance claims are very simple, and often result in an insurance company sending a vendor to make same-day repairs on your behalf. Just as often, claims are complex in nature, and may require your insurance company to spend multiple days assessing the damage. These are the cases that often necessitate policyholders to hire an experienced insurance attorney.
Legal Rights for Texas Policyholders
Indeed, these more complex cases are the ones where it is more likely for the insurance company to underplay the damage, to delay their response, or even to deny the claim altogether without offering any real justification. One-way policyholders can protect themselves is to be more aware of their legal rights.
So, what does the Texas Insurance Code actually say about policyholder rights? The big picture: Insurance companies owe a range of duties to their customers and ultimately have a responsibility to handle claims in a prompt and fair way. Also be aware that, when there is an ambiguity in the way an insurance policy is written, Texas laws demand the matter be resolved in the policyholder’s favor and any insurance company that breaches its duties may be liable to the policyholder for additional compensation, as well as any attorney’s fees.
Your Rights According to Texas Insurance Code § 542
There are several chapters of the Texas Insurance Code that are relevant to policyholders, but for today we want to highlight Texas Insurance Code § 542. This section regulates what insurance companies must do upon receiving a claim. A few key points:
Texas insurance companies are required to respond to your claim.
Within 15 days of you submitting a claim, the insurance company is legally required to acknowledge receipt of the claim; to begin an investigation; and to request any information from the policyholder that could prove relevant to the investigation. If your insurance company does not acknowledge your claim and let you know whether or not it has been accepted, they are violating their legal duties.
If the insurance company owes you money, when do they have to pay?
Texas Insurance Code prohibits insurers from delaying your payment. The Code lists some technical requirements, but as a general rule, your insurance company needs to make their determination and submit your payment within 60 days.
Can policyholders do anything to expedite this process?
The insurance company is legally granted a set timeframe to investigate your claim, but you can potentially speed things along by submitting any requested documents, evidence, or paperwork as promptly as you can.
Do you need to hire an attorney?
Make sure you document all correspondence with your insurance company, and if you believe they are neglecting their legal duties or acting in bad faith, hire an experienced Texas insurance lawyer. At McLaurin Law, we would be happy to talk with you more about your rights as a policyholder in the State of Texas. Contact us whenever you’d like to chat.
The Texas Insurance Code clarifies the duties of insurance companies, and the rights of policyholders. #insurance #insurancelaw #mclaurinlaw