Duties Of Insurance Company When Claim Is Made

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:
1) Accept or reject the claim. Section 542.056 tells us the insurance company must notify the claimant that by the 15th “business day” of its intent to accept or reject the claim. This deadline is extended to 30 “days” if the insurance company reasonably suspects arson. If the insurance company still needs additional time, it must tell the claimant within the specified time that additional time is needed and that can be an additional 45 days.
2) State reasons for any rejection. The same Section tells us that if the insurance company rejects the claim, the notice of rejection must state the reasons.
3) Ask for more time and tell why it is needed. If the insurance company is unable to accept or reject the claim by the regular deadlines, the insurance company may notify the claimant and state the reasons it needs more time.
4) Accept of reject the claim by the extended deadline. When the insurance company gives this notice, they must accept or reject the claim within the 45 additional days.
5) Pay claim after accepting. Section 542.057 tells us that if the insurance company accepts the claim, they must pay within five business days. This five business days is 20 for surplus lines insurance companies.
6) Pay the claim after the claimant performs any condition. If the insurance company conditions payment on some act by the claimant, the payment deadline is five business days after the act is performed.
7) Pay the claim within 60 days after receipt of information. Section 542.058 says the insurance company must pay the claim within 60 days after receiving the items requested from the claimant. This obviously would not apply if it is determined as a result of arbitration or litigation that a claim is invalid and should not be paid.
These deadlines can be confusing for anyone including the insurance companies themselves and lawyers who handle these claims because of the variables involved. Many times the insurance company is asking for information that is simply not needed to adjust and evaluate the claim. Of course, what is needed or not is also of much dispute. Other times they say they have not received needed information when the claimant knows they gave it to the insurance company. Any time that a claim is not paid promptly, an experienced Insurance Law Attorney should be consulted.