When an insurance company delays in paying a claim, there are often times remedies. Each case has to be looked at to determine what can be done. This issue is discussed in a 2023 opinion from the Southern District of Texas, Victoria Division. The opinion is styled, Naomi Odom v. Central Mutual Insurance Company.
This is a case wherein Odom suffered hurricane damage and made a claim for benefits. Central Mutual made an initial payment and then two additional payments. Later, another payment was made.
Odom was unsatisfied and eventually filed suit alleging breach of contract and other extra-contractual claims. Central Mutual invoked appraisal and upon completion of the appraisal, paid substantially more money on the claim.
Insurance claims for late payment are a frequent issue when someone sees an insurance lawyer about the way they have been treated in an insurance claim. This late payment issue is addressed in a 2023 opinion from the Northern District of Texas, Dallas Division. The opinion is styled, Craig Collins v. State Farm Lloyds.
In this case the insured suffered damages from a tornado. A claim was made immediately and State Farm sent out an adjuster. The initial found some damages and paid the damages. Collins asserted there were more damages and another adjuster investigated the claim and found more damages and paid those damages. Collins asserted there were still more damages and a third adjuster came out and additional damage was found and the damages were paid.
Collins sued for various causes of action including violations of the “duty of good faith and fair dealing,” Texas Insurance Code damages under Section 541, and finally for damages under Section 542. A reading of the case shows a discussion of the first two and here is the discussion under the Section 542, Prompt Payment of Claims.
The Blog from October 8, 2022, sets forth the law related to this Texas Prompt Payment of Claims fight. The facts and procedural history of the case can be obtained from the opinion.
This is an appeal from summary judgment.
The facts and history of the case can be gleamed from reading the opinion.
This Courts’ stating of the law regarding the Texas Prompt Pay statute is what is relevant to this posting.
The United States 5th Circuit Court of Appeals issued an opinion on August 12, 2021, that is noteworthy for Insurance Law attorneys. The opinion is styled, Randy Randel; Debra Randel v. Travelers Lloyds of Texas Insurance Company.
After a fire at their home, the Randels filed a claim for benefits from their home insurance company, Travelers. Eventually the parties agreed to an appraisal and the appraisal award was closer to the Randel’s view of the damages. Travelers had already paid an amount they thought was proper. After the appraisal Travelers paid the full appraisal amount.
The Randels brought suit against Travelers for breach of contract and violation of the Texas Prompt Payment of Claims Act. The breach of contract claim was denied by the Court but the Texas Prompt Payment of Claims violation went forward in the lawsuit.
A Federal Court for the Western District of Texas, Midland/Odessa Division issued an opinion in 2021, that deals with the Texas Prompt Payment of Claims Act (TPPCA). The style of the opinion is long. We will call it Woodcrest Capital, LLC, et al v. Zurich American Insurance Company.
The TPPCA is found in Chapter 542 of the Texas Insurance Code. Chapter 542 of the TIC does not contain a statute of limitations. District courts in the Fifth Circuit are split on whether a two–year or four–year statute of limitations applies to claims brought under Chapter 542, and the Fifth Circuit has not considered the issue. The dispute is whether the two-year statute of limitations included in Chapter 541 of the TIC or the four-year statute of limitations in Section 16.051 applies to claims arising under Chapter 542.
Plaintiffs contend Defendant violated Section 542.058 when it failed to pay Plaintiffs’ insurance claims within sixty (60) days after receiving all items, statements, and forms requested. Plaintiffs conclude that their TPPCA claim arises under the statute, not under the Policies; therefore, the contractual limitation does not apply to their TPPCA claim. Additionally, Plaintiffs argue the contractual limitation in the Policies does not apply to the TPPCA claim because the language in the Policies suggests that it only applies to claims for breach of duties imposed by the Policies. The Court agrees with Plaintiffs.