You may be entitled to statutory interest on that award – even if your insurance company paid the entire face value of the award.
*Interest can accumulate at a rate ranging between 10% and 18% from shortly after the claim was made
Unresolved Appraisal Issues and Insurer Misconduct
Even if your insurance company has paid some or all of the “face value” of the appraisal award, you still might be able to recover additional funds.
The Texas Prompt Payment of Claims Act
The Texas Prompt Payment of Claims Act, Section 542 of the Insurance Code, requires insurance companies to pay interest, in addition to the amount of the insurance claim, when the insurance company delays payment of the claim longer than the statute’s deadlines for making a decision on the claim. That deadline can be as short as 75 days after you notify the insurer of the claim.
*Appraisal does NOT extend these deadlines.
15 days after receiving your claim
Acknowledging your claim, beginning its investigation of the claim, and requesting relevant information from you
15 days after receiving all relevant information
Insurer must make a decision to accept or reject your claim
Within 5 business days
The insurer decides to accept your claim, it must pay the portion it accepted
Must make a decision within 45 days of notifying you that it needs more time
If the insurer needs more time to make a decision, it must tell you, and explain why it needs more time
60 days after receiving all information necessary to decide your claim
If the insurer delays payment the insurer “shall pay” interest and attorney’s fees, in addition to the amount of the claim.
Brief history of 542/rundown of Barbara Technologies v. State Farm Lloyd’s
This is a Texas Supreme Court case from 2019 where Raizner Slania represented Barbara Technologies, the plaintiff.
The Court’s decision overruled more than a decade of Texas legal precedent, which previously held the payment of an appraisal award prevented the policyholder from pursuing interest owed under the Texas Prompt Payment of Claims Act.
Previously, when an insurance company paid an appraisal award – no matter how long after a claim was filed, and no matter what the insurance company did to cause delays – the policyholder could not obtain the interest owed under the Act.
Barbara Technologies changed this.
Large appraisal awards can be tricky and often include amounts that an insurer company must pay later, usually after repair work is completed.
In some cases, an insurer may hold back the payment of depreciation – meaning the difference between today’s market value versus the full replacement cost – until repairs are completed. Insurers also hold back the payment of costs required to bring an older building up to current building codes.
In some cases, an insurer may simply decide it doesn’t want to pay the award, and will claim it gets a discount or offset for items pre-existing damage, wear and tear, manufacturing defects, faulty installation and other items it claims were not caused by the loss.
Like interest, these hold backs can add up, and when an insurance company unreasonably delays or refuses to pay the full award, Raizner Slania can help.
WHAT ELSE CAN YOU RECOVER AFTER AN APPRAISAL?
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