Property, including Hurricane & Storm, Insurance ClaimsServing Texas in Beaumont, Orange, Port Arthur, Galveston, Bolivar Peninsula, Jasper, and Surrounding Areas Hurricane and Other Property Damage Insurance Claims – General Rights Texans have very strong legal rights regarding claims filed against their own insurance companies for any residential or commercial property claim, whether caused by a hurricane, other storm, freezes or fire. Insurance companies are liable if they violate your legal rights. Property damage insurance is simple in concept: a property owner pays an insurer to cover certain damages resulting from the insured risks. In the case of hurricanes, owners purchase policies to cover the risks of damage from a hurricane, a windstorm and/or flood waters. The owner has a duty to notify the insurance company of property damage and to cooperate with the insurer in the investigation. The insurer has the duty to investigate the claim and determine what damage is covered and the value of that damage. Very specific rules apply to how and when the insurance company must do this. Most importantly: The burden is on the insurance company to prove what is not covered! Additionally, the insurance company must act in good faith and deal fairly with you in handling your insurance claim. You are entitled to assume that your insurance company will treat you fairly and follow the law. If the insurance company does not do so, you have the right to recover damages against the insurance company.
Types of policiesYour insurance policy tells you exactly what property and risks are covered by your insurance policy. There are two basic insurance coverages involved in hurricane claims:
- The first coverage is known as windstorm coverage and covers wind damage from the hurricane.
- The second is flood coverage and covers any damage by rising water, whether it is flood, tidal surge, tidal wave, wind driven rising water or any other type of rising water.
- Private coverage. Private flood insurance is written directly by an insurance company and the same rules apply to the insurer, which are discussed later in this section. Our lawyers handle only these private flood insurance claims, where the coverage is not provided through the federal flood insurance program.
- Federally underwritten coverage. Federally underwritten flood insurance is actually provided through FEMA (the Federal Emergency Management Administration) but may be sold to a property owner by a private insurance company’s agent. If the flood policy is underwritten by FEMA, it will say “federally insured” or “federally underwritten” flood insurance somewhere on the policy. The federal government is protected from any damages other than the actual flood loss under its policies because the policies are generally offered in locations where private flood insurance is so expensive almost no one would be able to afford it. Any federal flood insurance policy claim must be filed in federal court and will be tried before a federal judge or magistrate without a jury and with no possibility of getting any recovery greater than the actual insurance coverage. Flood coverage will not normally be part of typical homeowner’s insurance policies. It must almost always be purchased separately. Our firm does not usually handle federal flood insurance claims because we cannot get a client a recovery that will cover the attorney fees.
Texas Consumer Bill of RightsAt the end of every Texas homeowner’s insurance policy, there should be a section entitled “Consumer Bill of Rights for Homeowners, Dwelling & Renters Insurance” that all insurance companies are required to provide to insurance purchasers by the Texas Department of Insurance. This Bill of Rights identifies some (but far from all) of the rights you have under the Texas Insurance Code, including:
- Your insurance company cannot make false, misleading or deceptive statements relating to insurance.
- You have the right to reject any settlement amount, including any unfair valuation, offered by the insurance company.
- You have the right to have your home repaired by the repair person of your choice.
- The insurance company must tell you in writing why your claim or part of your claim was denied.
- You have the right to refuse to provide your insurance company with information that does not relate to your claim.
- Breach of Contract Claims (links to section below)
- Chapter 542 Late Payment Claims (links to section below)
- Chapter 541 Deceptive Insurance Practices Remedies (links to this section contained in the Insurance Law page)
- Bad Faith Breaches of the Duty of Good Faith and Fair Dealing Claims Remedies (links to this section contained in the Insurance Law page)
Breach of Insurance Contract ClaimsAlmost all states allow property owners to sue their insurers for breach of contract if the insurer fails to meet the conditions of its contract. Texas also recognizes this simple doctrine that provides if a policyholder timely pays his or her insurance premium and the insurer fails to fulfill its promises when a covered event occurs, the policyholder can sue to recover the promised benefits under the contract. If it is necessary to hire a lawyer to recover contract benefits, the insurer can also be held responsible for attorney fees and court costs, as well as prejudgment (pretrial) and post-judgment interest.
Texas Insurance Code Chapter 542 Late Payment ClaimsThe first communication between a property owner and the insurer after property damage or losses, during which the insurer learned of potential property damage, triggered much more specific duties and timelines under the Texas Insurance Code. In general, the insurer was required to perform a full investigation and make the full payment required by the terms of the insurance policy. Different sections of the Texas Insurance Code provide the details of when and how this must occur:
- Section 542.055 gives an insurance company only 15 calendar days to acknowledge in writing that it has received the claim, begin its investigation, and request any additional information or needed documents. While our courts have not clearly defined exactly what documents might be considered reasonable for the insurer to request, any requests must be related to the investigation to establish final loss.
- Section 542.056 provides that once the insurer receives the requested items from the property owner the insurer has 15 business days to notify the property owner in writing that the insurer accepts or rejects the claim or to ask for more time to decide the claim.
- Section 542.057 requires the insurer to make full payment of the claim or any undisputed portion of the claim within 5 business days of agreeing to the claim. If the insurer rejects the claim, it must provide the reasons for rejection in the notice of rejection. If the insurer is timely in its notice to the property owner, it gets an automatic 45 calendar day extension to decide the claim. In disasters like hurricanes, the Texas Insurance Commissioner usually extends the claims handling deadlines an additional 15 calendar days under Section 542.059.
- Section 542.058 provides that if an insurer fails to meet the required claims processing and payment deadlines after 60 days from receiving all documents reasonably requested from the insured property owner, the property owner has the right to collect 18% annual interest and attorney’s fees and court costs in addition to the fair claim amount.
- Section 542.060 provides this same penalty against the insurer for any other violations of the sections discussed. (The law probably does not allow recovery of this penalty more than once just because there are multiple violations.)
Insurance Company Tactics and BlundersThe preliminary periods for investigating and resolving most property damage claims pass quickly. Properly requested extensions soon pass. No Texas storm has ever generated the number of damage claims filed as Hurricane Ike in 2008. As a result, insurance companies faced unprecedented payouts in Texas. Many inexperienced adjusters were hired to help handle the claims. Unintentional mistakes were made on claims. Indecision was frequent. The temptation to try to save money clearly existed. Qualified and unqualified experts were hired to assess damage, causes of damage, property values and costs of repairs. Costs of materials and labor for repairs escalated. Flood insurers said the damage is from wind and wind insurers claimed the flood waters caused the damage. Texas law puts the burden of proof on the insurance company to prove that the damage was not covered by the insurance policy. The insurance company does not get to shift that burden to you and ask you to show that the damage was covered. The insurer has the duty to show what damage is not covered. Bush Lewis lawyers were in the middle of the Hurricane Ike fight against overreaching property insurers. Our experts inspected structures throughout Southwest Louisiana and Southeast Texas, from fishing cabins to luxury homes and from small mom and pop businesses to major shipyards for us. In addition to many different kinds of property damage claims and losses over the years and Hurricane Rita claims, Bush Lewis successfully handled over 100 serious Hurricane Ike claims in Orange, Jefferson, Jasper, Newton, Chambers, Galveston and Harris counties.
Insurance Policies and Insurer Legal Rights Are Not Self-EnforcingYour insurance policies are written by insurance companies and your claims are investigated by the same insurance companies. To offset this imbalance, Texas has strong laws to help property owners in their claims against insurance companies. Neither your insurance policy nor these consumer laws are self-enforcing. Your insurance company may or may not provide you what your policy and the law say you are owed for the premiums your have paid. If you feel your insurance company has not handled your property damage insurance claim properly, or has not acted in good faith, by inappropriately denying, delaying, underpaying, or investigating your claim, contact qualified trial lawyers to make the insurance company keep its part of the bargain for which you paid your premium dollars. Get legal help with hurricane, storm and other property insurance claims from Beaumont Hurricane Claim Attorney, Ken Lewis of Bush Lewis, PLLC. Good property claim lawyers know how to use all the legal tools available to properly resolve storm and other property insurance claims. Ken Lewis has handled hurricane claims in Orange, Port Arthur, Beaumont, Jasper, Bolivar Peninsula, Anahuac and Lumberton and in Jefferson, Chambers, Liberty, Hardin and Galveston counties. Call 409.835.3521 or contact an attorney at Bush Lewis online today for a free consultation to find out your legal rights and options.
Know This Before An Accident
No one plans to have an accident and no one expects to sustain a serious injury or lose a loved one to death from someone else's actions or mistake. It helps to at least have heard what experienced lawyers say you can do to ease the situation. At Bush Lewis, we think there are some helpful guidelines that we recommend to you. Our lawyers suggest: Learn more.