| For many business and home owners whose | | | | prescribed deadlines, they can be liable for the full |
| property was damaged by Hurricane Ike, the road to | | | | amount of the claim, plus damages including |
| financial recovery may be longer than anticipated. It's | | | | attorney's fees and an additional 18% per annum in |
| well known that some insurance companies | | | | addition to the amount of the claim. |
| systematically avoid paying the full value of claims. | | | | Duties of the Insurer |
| The good news is that Texas law protects | | | | The following duties are imposed on insurance |
| policyholders from unfair insurance practices. This | | | | companies after they receive notice of a claim: |
| article outlines the duties of the insurer and the | | | | - They must acknowledge receipt of the claim. Each |
| deadlines they are obligated to meet once they have | | | | separate claim requires separate acknowledgment. |
| been notified of a claim. Hurricane Ike left billions in | | | | - They must record the acknowledgment, making a |
| insured damages | | | | record of the date, means, and content of the |
| It's been nearly a month since Hurricane Ike cut its | | | | acknowledgment if it is not in writing. |
| destructive swath through the southeast Texas | | | | - They must begin an investigation of the claim. |
| communities that surround Galveston Bay. In its | | | | - They must request from the claimant all items, |
| wake, is estimated to be as much as $18 billion or | | | | statements, and forms that the insurance company |
| more in insured damages. The most severe damage | | | | reasonably believes will be required from the claimant. |
| was inflicted on coastal communities like those on | | | | Multiple requests may be permitted when reasonably |
| Galveston Island and Bolivar peninsula. But due to | | | | necessary, but multiple incremental requests may in |
| the unusually large size of the storm, widespread | | | | certain cases be a violation of the statute. |
| damage was inflicted over a much larger inland region | | | | With a few exceptions, most insurers must perform |
| covering the entire Houston-Sugarland-Baytown | | | | these duties within 15 days following receipt of notice |
| metropolitan area. With an estimated population in | | | | of a claim. |
| this affected area of nearly 6 million people, it is easy | | | | Additional Duties & Deadlines |
| to imagine how insured losses can mount very | | | | Once the insurance company receives all items, |
| quickly. | | | | statements, and forms reasonably required by them, |
| Living and working in the Houston area has almost | | | | they are obligated to fulfill the following duties: |
| returned to normal again. The last people I knew of | | | | - The insurer must notify the claimant in writing within |
| who didn't have electricity, have had their power | | | | 15 business days that it accepts or rejects the claim. |
| restored for almost a week now. The portable | | | | There is an exception permitted if the insurer |
| generators are finally silenced, the long lines at gas | | | | suspects arson, and the insurer can also get a 45 day |
| stations are gone, and although the cleanup | | | | extension of the deadline. |
| continues, nearly all streets are clear of debris (if you | | | | - If the insurance company rejects the claim, the |
| discount the piles along the curbs). For most of us, | | | | rejection notice must state the reason(s) for |
| the worst of it is over. For others however, the | | | | rejection. |
| real headaches are just beginning as insurance claims | | | | - If the insurance company cannot accept or reject |
| for hurricane damage are made and, in an alarming | | | | the claim by the normal deadline, they must notify |
| number of cases, denied. | | | | the claimant and explain why more time is needed. |
| Don't be cheated | | | | - Even if the insurance company gives notice of a |
| It's old news that some insurance companies practice | | | | requirement for additional time, they must still accept |
| systematic strategies to avoid paying full value for | | | | or deny the claim within the additional 45 day period. |
| claims. In the wake of Hurricane Katrina, the Louisiana | | | | - If the claim is valid, the insurance company must |
| State Attorney General filed a lawsuit against six | | | | pay the claim within 60 days after receiving the items |
| major insurance companies including State Farm and | | | | requested from the claimant. This is a strict deadline |
| Allstate. The suit claimed that insurance companies | | | | and if an insurer fails to meet it, they are liable for |
| coerced their policyholders into settling their claims | | | | the claimant's attorney's fees and damages of an |
| of damages for less than their value by editing | | | | additional 18% per annum in addition to the amount |
| engineering reports, by delaying payment and by | | | | of the claim. |
| forcing policyholders to litigate claims to receive full | | | | - The insurer must pay the claim within 5 business |
| value. The suit relied on information about a study | | | | days after notifying the claimant that the claim will be |
| conducted for Allstate by a major consulting firm | | | | paid. |
| that advised the insurance company to don boxing | | | | - If the insurance company makes an act by the |
| gloves and pummel anyone who didn't settle for | | | | claimant a condition of payment, then the deadline is |
| pennies on the dollar. A book titled Good Hands to | | | | 5 business days after the act is performed. (Surplus |
| Boxing Gloves tells the story which is now | | | | lines insurers have 20 days for fulfill their obligations |
| yesterday's news. Or is it? | | | | under either scenario.) |
| My own home suffered substantial damage from the | | | | Get help if you need it |
| hurricane and I'm happy to report that my own | | | | Texas business and home owners have been through |
| insurance provider acted quickly and in good faith to | | | | enough simply surviving the impact and the ensuing |
| settle our homeowners insurance claim fairly. But | | | | aftermath of Hurricane Ike. Policy holders who are |
| reports of unfairly denied claims, delays in adjusting | | | | experiencing difficulty due to the unfair practices of |
| claims, and unfair settlement offers are emerging. | | | | their insurers deserve better. If you have been |
| Many area residents and business owners are | | | | treated unfairly by an insurance company, you may |
| understandably frustrated with the process. | | | | be entitled to compensation over and above the |
| Fortunately, Texas law provides ample protection for | | | | value of your insurance claim. Depending on the |
| policy holders from unfair insurance practices. | | | | circumstances, not only your insurance company, but |
| Unfortunately, few policy holders have any idea what | | | | also their representatives and agents can be liable for |
| their rights are and what protections are afforded | | | | unfair settlement practices, misrepresentations, |
| them under the law. | | | | breach of contract or other behaviors prohibited by |
| Prompt payment of insurance claims | | | | law. |
| Texas law, specifically the Prompt Payment of Claims | | | | Don't be bullied into accepting less than the full value |
| Statute provided in the Texas Insurance Code, | | | | of your hurricane damage insurance claim. Get help |
| imposes certain deadlines for an insurance company | | | | if you need it from a qualified attorney with |
| to acknowledge, investigate, and accept or reject a | | | | experience handling first party insurance claims |
| claim. Policy holders may not even realize that if their | | | | litigation. |
| insurance company fails to fulfill its duties within the | | | | |