The Texas Consumer Bill of Rights
Texas has implemented a Consumer Bill of Rights when it comes to homeowners’ or renters’ insurance policies. The Consumer Bill of Rights, among other things, prohibits your insurance company, agent, or adjuster from “making false, misleading, or deceptive statements relating to your insurance.” Other provisions cover your privacy rights and include protections against being denied coverage in the first place. The Consumer Bill of Rights is enforced by the Texas Department of Insurance.
Bad Faith in the
If, for example, your roof is crushed by a falling tree, your insurer has a responsibility to promptly investigate the incident on-site. They also have an obligation to promptly communicate with you, the policyholder, and to honor the provisions of your policy.
To do all of this, they will assign a claims adjuster to investigate. The adjuster should inspect the damage firsthand and also communicate with you about what happened. This is where things can get tricky.
The claims adjuster may tell you your policy provides only for a certain percentage of the costs for repairing the roof, when in fact, it provides for full replacement cost minus your deductible. The adjuster may also keep dragging out the investigation in the hope you tire of the process and accept the first offer they tender, even if it is a low-ball offer. Another tactic is to send you an initial payment to cover the start of repairs and later to claim that that payment was the full amount due to you. They may also try to find some reason to simply deny your claim.
State-Imposed Time Limits
Texas requires insurers to settle claims within 35 business days. They have 15 business days after a claim is filed to acknowledge it by forwarding the instructions and paperwork needed by the policyholder. The paperwork should include proof-of-loss forms, which serve as a sworn statement by the policyholder as to the extent of the damage or injuries. The insurers then have five business days to make the final payment once the claim is approved.
Trust a Team of Skilled Attorneys
It almost goes without saying that the insurance company is going to try to low-ball you on their initial offer, hoping you accept it so they can close the book and end their liability.
At the first sign of stalling or low-balling by the insurer, you need to get an attorney involved who is familiar with the claims process and is accustomed to standing up to their tricks and tactics. If you try to go it alone, you can easily fall victim to their bad faith settlement practices without knowing it.
Even if the insurer settles with you equitably, they may try to recoup their expenses by raising your premium. You should involve attorneys in this as well because you should not be punished financially for making a valid claim.
If your claim cannot be resolved to your satisfaction through negotiations with the adjuster, you can proceed to file a lawsuit based on their bad faith tactics, which are prohibited by the Unfair Claims Practices Act.