Fort Worth insurance lawyers would know the penalties available when an insurance company does not promptly pay a claim.
The Prompt Payment of Claims Act provides for 18% per annum damages, in addtion to the amount of the claim, plus attorney fees, plus this is on top of other types of remedies that may be available.
Section 542.060 says:
Tarrant County Insurance lawyers should be able to give you a response to the above question.
The first place to look for guidance is the Texas Insurance Code, Section 542.057(a). This section requires payment by the fifth business day after the claim is accepted by all insurance companies except surplus lines insurance companies. Surplus lines insurance companies have 20 business days to make payment.
The 1998, case Daugherty v. American Motorists Insurance Company is from the Houston Court of Appeals [1st Dist.] and has held that oral notice that the insurance company intends to pay the claim is not sufficient.
Tarrant County attorneys who handle insurance cases need to understand the rules related to the Texas Prompt Payment of Claims Act.
Texas Insurance Code, Section 542.056(c) says “If the insurer rejects the claim, the notice required by Subsection (a) or (b) must state the reasons for the rejection.” Arguably, an insurance company that fails to comply with this requirement could be held to have waived additional reasons that were not timely raised. However, this argument was rejected in a 2005, 5th Circuit Court of Appeals case. That court stated that the insurance company could raise an additional defense, where there was no allegation that the initial reason was unreasonable or made in bad faith.
Here is something to think about:
Dallas County insurance attorneys will understand the responsibilities of an insurance company to accept or reject an insurance claim.
Usually the first thing an experience Insurance Law Attorney will ask of a potential new client who says their claim has been denied, is a copy of the rejection letter.
Texas Insurance Code, Section 542.056(a), is the statute that requires an insurance company to give written notice it is accepting or rejecting a claim. A telephone call from the insurance adjuster notifying the claimant of the amount of the loss will not constitute “notice of payment of claim,” because the statute requires that the acceptance or rejection be in writing. This was an issue that went against the insurance company in the Houston, 14th District, Court of Appeals case styled, Daugherty v. American Motorists Insurance Company. Further, the insurance company’s written response acknowledging only that a claim has been received does not constitute an acceptance or rejection under the statute. This was made clear in the Corpus Christi Court of Appeals case styled, Northern County Mutual Insurance Company v. Davalos.
Parker County attorneys probably know the law about this case even if they have not read the case. The case is an opinion from the Houston Court of Appeals, First District. The style of the case is, Texas Farm Bureau Underwriters and Texas Farm Bureau Insurance v. Douglas Rasmussen and Kathy Rasmussen.
The Rasmussens owned a rental house located in Texas. Beginning in 2006, the Rasmussens insured the house with Texas Farm Bureau. To encourage a shift in their insurance provider, the insurance agent, Bolton, told the Rasmussens that he would take care of the Rasmussens’ insurance needs, provide more personalized service, and notify them of any changes to their policies.
The Rasmussens renewed the policy that covered the rental home in June 2007. They paid the premium for the term of June 1, 2007 to June 1, 2008. They did not pay the premium when it was again due in June 2008. In January 2009, the fire occurred. The Rasmussens submitted an insurance claim, but the Texas Farm Bureau denied it.
Fort Worth insurance lawyers would want to read this case from County Court @ Law #3 in Tarrant County. The case is styled Stadium Auto, Inc. v. Loya Insurance Company and the opinion was issued by the El Paso Court of Appeals.
Here is some relevant information.
Stadium Auto, Inc. appeals from a summary judgment granted in favor of Loya Insurance Company.
Dallas insurance attorneys need to know about this recent Federal Court case. The style of the case is Mario Santacruz v. Allstate Texas Lloyds, Inc.
Mario, “Plaintiff” claimed that he reported the damage to Allstate “Defendant”, but Defendant could not inspect the home at that time. Based on a contractor’s recommendation, Plaintiff had the roof repaired to prevent further damage. Defendant then denied coverage for the claim. Plaintiff raises causes of action against Defendant for (1) breach of the common law duty of good faith and fair dealing; (2) violations of the Texas Deceptive Trade Practices Act (“DTPA“); (3) violation of Texas Insurance Code bad faith sections 541.060(a)(2)(A) and (a)(7); and (4) intentional infliction of emotional distress.
Defendant states that immediately after the storm that is alleged to have damaged Plaintiff’s roof, a tarp was placed on the roof to prevent further water intrusion. Plaintiff did not know whether the shingles were blown off by the wind. The next morning, Plaintiff reported the damage to Defendant and spoke to employee Almirna Martinez. Plaintiff told Martinez about the storm and about the roof being tarped and stated that he had workers at the house ready to fix the roof. Because the workers were already on site, Plaintiff requested that Defendant send someone to his home to examine the roof. Martinez informed Plaintiff that Defendant could send an adjuster to his home in a couple of days. Nevertheless, Plaintiff had the entire roof replaced that day. Thus, when Defendant’s adjuster arrived at Plaintiff’s home two days later to inspect the roof, it had already been replaced. Defendant claims that due to its inability to investigate the loss, it did not indemnify Plaintiff’s claim.
Arlington insurance attorneys need to know one case real well as it relates to an insurance company accepting or rejecting a claim.
The case is a 1999, Tyler Court of Appeals case styled, Dunn v. Southern Farm Bureau Casualty Insurance Company. This case tells insurance lawyers many things.
1) That each separate claim filed by an insured requires written acknowledgement. It is arguable that separate acknowledgements are required for separate claims arising from the same accident.
Dallas insurance lawyers should be able to discuss all of the enclosed with you.
The Texas Insurance Code, Section 542.055, says an insurance company shall acknowledge receipt of a claim within 15 days after they receive notice of a claim and begin its investigation and request from the claimant all they reasonably need at that time to further their investigation. So what happens after that?
No additional deadlines are triggered until the insurance company receives all items, statements, and forms reasonably required by the insurance company. Once the insurance company receives that information, seven new responsibilities arise:
Parker County lawyers who handle insurance cases need to know some of the duties imposed on insurance companies when handling a claim for benefits.
The Texas Prompt Payment of Claims Act is found in the Texas Insurance Code. It details the duties imposed on an insurance company when a claim is made.
When an insurance company receives notice of a claim from one of its insureds, there are four duties that are imposed on them.
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