Late Payment Of Claims – How To Make A Claim

When making a claim, what is required of the claimant?  Here is some guidance.
Pursuant to Texas Insurance Code, Section 542.051(4), there is no particular content required, as long as the claim “reasonably apprises the insurer of the facts relating to the claim.”
The statute requires that the claim be in writing.  The statute provides that “notice of claim” means “any written notification provided by a claimant to an insurer that reasonably apprises the insurer of the facts relating to the claim.  A 2005, Austin Court of Appeals, in an opinion styled, McMillin v. State Farm Lloyds, has strictly applied the requirement of written notice, holding that a phone call was not sufficient.
Keep in mind that because the statute required written notice, but insurer’s routinely accept notice of claims by phone, a potential trap exists.  If an insurer calls to give notice of a claim, the insurer may commence investigation, but be able to argue that the statutory protections do not apply.  Lawyers for insureds should try to make sure written notice was given, to avoid this argument.  Often the lawyer does not become involved in time to influence the form of the notice, so it may be necessary to argue that by proceeding with the investigation the insurer waived this right.  Alternatively, any assurances or conduct by the insurer leading the insured to believe oral notice was sufficient could support an estoppel argument.  Of course, an attorney for the insurer should determine if written notice was not given and, if not, argue that the statutory deadlines were not triggered.  Requiring the insured to later give notice could give the insurer a “do over” chance to meet deadlines that were blown before.
In the 1999, Tyler Court of Appeals opinion styled, Dunn v. Southern Farm Bureau Casualty Insurance Company, it was determined that it is sufficient to present a claim through an attorney.
In the 1994, Austin Court of Appeals opinion, Mid-Century Insurance Company v. Barclay, the court rejected the insurer’s argument that an insured giving notice of a claim must identify the specific elements of the policy and expressly state an intent to assert a claim under each.  This same court said that although the statute calls for written notice, oral notice may be sufficient, and held that a phone call from the insured was sufficient notice to the insurer.
In 1967, the Texas Supreme Court, in Massachusetts Bonding & Insurance Company v. Orkin Exterminating Co., held that if the insurer receives oral notice or written notice that is deficient, but the insurer proceeds to investigate anyway, the insurer may be held to have waived any complaint.  Insurers are aware of the requirement that notice of the claim be in writing.  If they proceed without written notice, that is conduct consistent with assertion of a known right – i.e., waiver.  This was also held to be the case in the 1997, Texarkana Court of Appeals opinion styled, Bekins Moving & Storage Co. v. Williams.  In that case, the court held the insurer waived asserted conditions precedent by proceeding to handle the claim despite noncompliance.
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