Insurance Claims And Claimants

Insurance lawyers in Kennedale need to know these basics regarding insurance claims and claimants when looking at the Prompt Payment of Claims Statutes.
The Texas statutes regarding Prompt Pay are found in the Texas Insurance Code. It is there we find that the protections of the insurance statutes apply to a “claimant” who is defined as “a person making a claim.” This is found specifically in Section 542.051(3).
The statute provides:
– In Section 542.051(3) a “claimant” is a person making a claim.
– In Section 542.051(2) a “claim” is a first party claim that is made by an insured or a policyholder under an insurance policy or contract or by a beneficiary named in the policy or contract, and that must be paid directly to the insured or beneficiary.
– In Section 542.051(4) “notice of claim” means any written notification by a claimant to an insurer that reasonably apprises the insurer of the facts relating to the claim.
– In Section 542.055(a) the statutory deadlines begin once the insurer receives notice of a “claim,” from a “claimant.”

The term “claimant” does not limit the statute to those claims where the insurer is dealing directly with the insured. The insured’s retention of legal counsel does not cause the insured to lose their “claimant” status under the statute. The was the decision in a 1999, Tyler Court of Appeals opinion styled, Dunn v. Southern Farm Bureau Casualty Insurance Company. In Dunn the court stated:
Thus, the logical conclusion is that Dunn remains a “claimant” under the statute even though her claim was presented by an attorney … The impact on insurance claimants by the practices condemned in the (Prompt Pay Statutes) is the same whether the claimant is represented by counsel or not.
In a 1998, Federal case out of the Texas Northern District held that a judgment creditor of an insured is not a claimant entitled to relief under the (Prompt Pay Statutes). This Federal Court opinion is styled, Hartmann v. St. Paul Fire & Marine Insurance Company.
It is worth noting a few examples of first party claims. They include but are not limited to uninsured motorist claims, plumbing leak claims, life insurance claims, and business interruption claims. Again, these are just a few examples of “first party” claims governed by the Prompt Pay Statute. An insured’s claim for a defense under a liability policy may also be considered a first party claim under this statute.
Keep this in mind – – By focusing on first party claimants, these definitions would exclude persons making claims against another person’s policy. This means the ruling made by the Texas Supreme Court in 1994, is good law, that a third party claimant has no standing to sue an other party’s insurer under the Prompt Pay statutes for unfair business practices. The style of that case is, Allstate Insurance Company v. Watson.