Delay in Paying Claim

How Long Does An Insurance Company Have To Pay A Claim

August 20, 2011 | Mark S. Humphreys

Anyone in Grand Prairie, Weatherford, Fort Worth, Dallas, Arlington, Aledo, or anywhere else in Texas may ask the question which is the title of this post. The answer is not as easy as one would hope it to be.

The Texas Insurance Code has a subchapter titled “Prompt Payment of Claims.” This subchapter consists of eleven sections. To answer the question of how long an insurance company has to pay a claim, the section has to be read with the applicable policy and then apply both to the facts of the case.

A 1998, Fourteenth District Court of Appeals case styled, John A Daugherty, Jr. v. American Motorists Insurance Company, deals with the question. The case was decided by the trial judge in favor of the insurance company and then the decision was upheld by this appeals court. Here is the story.

Insurance Payment Delays

August 18, 2011 | Mark S. Humphreys

If you have insurance in Grand Prairie, Arlington, Fort Worth, Mansfield, Dallas, Irving, Mesquite, Garland, or anywhere else in Texas, you would like to think that when you make a claim against your insurance company, that they are going to pay your claim and they are going to pay it promptly. The following is a case where they, first refused to pay then later decided to pay, but by that time it was a late payment.

This is a 1996, Texarkana Court of Appeals case styled, Southland Lloyd’s Insurance Co. and James D. Webb, III v. Charles W. Tomberlain, individually and d/b/a Charles Tomberlain Insurance Agency and Charles M. Tomberlain. The case is somewhat complicated and deals with other issues besides the prompt payment of the claim but the facts are kinda interesting to follow and the law regarding prompt payment is discussed enough to educate.

Southland and Webb were appealing a judgment entered in a lawsuit by Charles M. Tomberlain for delayed payment of an insurance claim. The court reversed the judgment and remanded for a new trial due to errors regarding the jury charge, exclusion of expert testimony, and the granting of a directed verdict.

Insurance Company Slow Paying Claim

June 16, 2011 | Mark S. Humphreys

Someone in Weatherford, Mineral Wells, Aledo, Hudson Oaks, Willow Park, Brock, Millsap, Peaster, Azle, Cool, Cresson, or anywhere else in Parker or Palo Pinto Counties might wonder – How long do I have to give an insurance to pay a claim before I can do something about it? The lawyerly answer to that is – It depends.

First, if an insurance company is being too slow in paying a claim, a person should not have any hesitation in approaching an experienced Insurance Law Attorney.

Second, there is a section of the Texas Insurance Code titled the “Prompt Payment of Claims Act” which gives guidance to the question, – When is too long – too long?

When Are Claims Paid?

June 7, 2011 | Mark S. Humphreys

It would be natural for someone in Grand Prairie, Fort Worth, Arlington, Dallas, Mesquite, Garland, Farmers Branch, Duncanville, De Soto, or anywhere else to think that a claim should be paid pretty soon after it is made. Here is a case to read and think about the next time an insurance conmpany is slow paying a claim.

The case was decided by the Court of Appeals, Dallas, and is an appeal from County Court at Law No. 5. The opinion was issued in May 2011. The style of the case is “Cypress Texas Lloyds Property and Casualty Insurance Co. v. Fred Carrington.

Carrington won at the trial level and Cypress appealed. Here are some of the facts of the case.

Delay In Paying The Claim

November 20, 2010 | Mark S. Humphreys

How long can an insurance company take to pay a claim to an insured in Dallas, Fort Worth, Arlington, Grand Prairie, Mesquite, Richardson, or anywhere else in Texas. The answer is – as long as they want – and even if they have good reason for the delay – it is going to cost them.

A 1997 case decided by the United States Court of Appeals, Fifth Circuit, is a good example of what can happen when an insurance company doesn’t pay a claim in a prompt manner. The style of the case is, John Higginbotham v. State Farm Mutual Automobile Insurance Company.

Here are some facts in the case:

Delay In Paying Life Insurance Claim In Texas

November 18, 2010 | Mark S. Humphreys

If someone in Dallas, Fort Worth, Grand Prairie, Arlington, Carrollton, Garland, Mesquite, Grapevine, Duncanville, Burleson, or anywhere else in Texas, has a life insurance policy, how long does the life insurance company have before it has to pay the benefits to the beneficiary? The answer is, it depends. But the Texas Prompt Payment of Claims Act still applies.

There is a Waco Court of Appeals case decided in August of 2005, that explains how the Prompt Payment of Claims Act can apply in a life insurance situation. The style of the case is, State Farm Life Insurance Company and Lisa Martinez Paul v. Toni Wasson.

This is a case where the insurance company, State Farm Life Insurance Company, confused itself about who it was suppose to pay policy proceeds to. It is not that unusual for an insurance company to have some doubt about who the rightful beneficiary is under a policy of life insurance. When there is confusion the life insurance company will usually file an “interpleader action” in a local court and then let the court decide who should receive the proceeds of the life insurance policy.

Delay In Paying Claim In Texas

November 16, 2010 | Mark S. Humphreys

Someone in Dallas, Fort Worth, Grand Prairie, Arlington, Mansfield, Mesquite, Garland, Plano, Weatherford, or anywhere else in Texas, may experience a delay in being paid when making a claim against their insurance company. Is that ok? The answer is no, according to the Texas Prompt Payment of Claims Act.

The Texas Supreme Court decided a case in 2004, wherein the topic had to do with how the Texas Prompt Payment of Claims Act impacted the decision in the case. The style of the case is, Republic Underwriters Insurance Company v. Mex-Tex, Inc. The court phrased the issue this way: We must decide whether the commercial property insurer in this case breached its policy obligation to replace a damaged roof with one of “like kind and quality”, and if so, whether the insurer’s tender of partial payment of the claim avoided, on that amount, the 18% per annum delay penalty imposed by the Prompt Payment of Claims Act of the Texas Insurance Code.

Following a May 25, 1999 hail storm in Amarillo declared by the Texas Department of Insurance to be a weather-related “catastrophe for the purposes of claims processing”, Mex-Tex, Inc. notified its property insurer, Republic Underwriters Insurance Co., of damage to the roof of Signature Mall, a retail shopping center that Mex-Tex owned. Mex-Tex claimed that the roof had been destroyed and should be replaced. Republic immediately investigated the claim but disputed the amount of damage attibutable to hail.

Prompt Payment Of Claims Act

March 24, 2010 | Mark S. Humphreys

A Grand Prairie resident makes a claim to his insurance company for benefits. This could be a resident of Arlington, Dallas, Fort Worth, Weatherford, or any other city in Texas.

A question often comes up that goes like this, “How long does the insurance company have before they have to pay me?” The answer is “It depends.” Sounds lawyerly, right. Well it does depend. It depends on a number of factors, including the type of claim, the circumstances surrounding the claim, the type of insurance and the type of insurance company. However, guidelines to go by, are laid out in the Texas Insurance Code, Section 542.051 thru 542.061.

This area of the Texas Insurance Code is know as the “Prompt Payment of Claims statute”. It imposes certain deadlines for an insurance company to acknowledge, investigate, and accept or reject a claim. In situations where the insurance company violates the statute, they are punished by being liable for attorney’s fees and an additional 18% per annum penalty on the amount of the claim. These penalties are set out in Section 542.060.

18% Penalty On Insurance Company For Not Paying Claims On Time

January 26, 2010 | Mark S. Humphreys

The Texas Insurance Code requires an insurance company to pay a claim within 60 days of receiving all the information it needs to make a determination of whether or not a claim should be paid and the amount to be paid. The requirement is found in the Texas Insurance Code, Section 542.058. In the event of a weather-related catastrophe, as defined by the Texas Commissioner of Insurance, the period is extended to 75 days. This is found in Texas Insurance Code, Section 542.059. The law here applies to all residents of Texas including those in Dallas, Fort Worth, Arlington, Grand Prairie, or even out in Weatherford or Parker County.

Section 542.059 was recently part of a lawsuit in a case decided on December 15, 2009. The case was styled, Philadelphia Indemnity Insurance Company v. C.R.E.S. Management, L.L.C.

In this lawsuit, CRES owned five properties that suffered multiple losses. Philadelphia had paid all claims on three of the properties but still disputed losses on the others. On the two properties that the dispute existed, Philadelphia did not dispute that they owed atleast part of the claim but not all of the claim. On the part not disputed, Philadelphia did not pay until after the applicable 75 day deadline.

Attorney’s Fees In Insurance Lawsuits

January 25, 2010 | Mark S. Humphreys

Almost all insurance disputes are going to have situations where an attorney is involved. Too many times these disputes end up in lawsuits. Prior posts on this blog have shown how most situations are going to require the insurance company to pay or reimburse attorneys fees where the policy holder prevails in their claim.

In 2007 a case, Lamar Homes, Inc. v. Mid-Continent Casualty Company, the Texas Supreme Court ruled that Section 542.060, Texas Insurance Code, applied to not just the underlying claim at issue in a lawsuit but to also attorneys fees in situations where the insurance company did not pay for attorneys on behalf of the insured persons or business.

Section 542.060 assesses an 18% annual penalty on the attorneys fees that the insurance company did not pay for.