The recent storms that have hit all over Texas – from Houston to Fort Worth to San Antonio – will have many property owners filing commercial property insurance claims. Regardless of how and when property damage occurs, insurance companies are governed by regulations that dictate how quickly they must acknowledge, investigate, and resolve claims. To best prepare for filing your business insurance claim, it’s important to know how long the claims process generally takes and what you can expect.
Step One: Providing Notice of the Claim
It may seem obvious, but it cannot be understated how important it is to immediately contact your insurance carrier once you have discovered property damage. While some damage might be obvious, like a tree falling on your roof, other damage may be harder to spot, like small holes in the roof from shingles blown off in a storm. In both cases, failing to address the damage could cause further damage to the property. To provide evidence of the damages you are claiming, take pictures and/or video of all affected aspects of the property. You must always give “reasonable notice” of a claim to your insurer, and oftentimes insurance policies specify a time period of one to two years.
Step Two: The Investigation Process
Once you have submitted your claim, your insurance carrier has 15 calendar days to 1) acknowledge the claim, 2) begin its investigation, and 3) request any additional information it reasonably requires. All of this must take place within 15 days of notice, or in the case of a surplus lines carrier, 30 days of notice.
Step Three: Approval or Denial
After the insurance carrier has received all requested documents, they have 15 days to make a determination on the claim. If the claim is approved, the carrier has five business days to issue payment. If the insurer is a surplus lines carrier, it has 20 business days issue payment.
The insurance process in Texas is legally required to be complete within 60 days of the initial notice, unless a specific exception applies. If the insurance company fails to follow these rules, Texas policyholders have the right to collect 18% annual interest and attorneys’ fees, in addition to the claim amount.
In the case of a natural disaster, it may be logistically difficult for an insurance company to properly investigate and make determinations on a massive number of claims in the statutorily prescribed timeframe. An insurance carrier that needs more time address a claim can take 45 days to make its decision as long as it sends the policyholders notice explaining the delay. The Texas Department of Insurance can also grant insurance companies an additional 15 days to decide on a claim if there has been a natural disaster.
Bad Faith Insurance Attorneys
More information on Texas prompt payment and unfair claims settlement practices rules can be found in Section 542 of the Texas Insurance Code, If your insurance company has unlawfully delayed your commercial property insurance claim, you have the right to seek compensation. The attorneys at Raizner Slania have extensive experience helping policyholders obtain rightful and timely payments from insurance companies around the world. Call today for a free consultation.