Texas Insurance Policyholders’ Guide

Step One: Promptly Notify Your Insurer of the Loss

Notify your insurance company as soon as you discover the damage from the loss. Once you have notified the insurance company of the loss, it has 15 days to acknowledge your notice, commence an investigation and request documents it may need for its investigation[1]. If the weather event is determined to be a catastrophe, the carrier is given 15 additional days.

Step Two: Document the Loss & Every Contact with Your Insurer & Its Adjuster

Document the damages caused by the loss with photographs or video. Once you have notified the insurance company of the loss, it will usually send an adjuster to inspect and document the damages. However, it is important to keep your own documentation as well. Do not dispose of damaged property until your insurance company has inspected the property or declined to do so.

Additionally, document all communications with the insurance company and its adjuster. Most insurance companies keep claims diary notes, which include communications with the policyholder, so having your own “claims diary” and documentation may be helpful if a dispute later arises as to representations made to you or as to the extent of the damages.

Step Three: Mitigate Your Damages—Protect Your Property from Further Damage

In Texas, a policyholder is required to mitigate damages at “trifling” expense. This means that you must do what you can afford to do to keep any of the damages from getting worse. Examples of mitigation are placing a tarp over a hole in your roof or shutting off the water supply to your building when a pipe has burst.

Step Four: Cooperate with Reasonable Requests for Documents & Inspections

Within 15 business days after conducting its investigation, the insurance company must notify the policyholder of its decision to pay or deny the claim, or whether it requires more information in order to make its decision[2]. If it decides to pay on the claim, it must do so within 5 business days[3]. In the event of a catastrophe, the carrier is given 15 additional days.

Most policies require the policyholder to allow the insurance company reasonable access to inspect the damages and to comply with reasonable requests for documents, such as receipts or invoices. It may require more than one inspection. As long as the requests are reasonable, a policyholder should comply.

If the insurance company has required more information in order to make a claim decision, it must pay or deny the claim within 45 days after such notice[4].

Step Five: Beware of Releasing and/or Waiving Your Rights

Once an insurance company has made a decision of what it believes is owed under the policy, it must make an undisputed claim payment. It is a violation of the Texas Insurance Code for an insurer to ask a policyholder to sign a release of liability or a waiver of rights in order to receive an undisputed payment of policy benefits.

If an insurance company claims that some of the claim payment is actually disputed, it may have a right to ask for a release. However, never sign a final settlement, release of liability, or waiver of rights without fully understanding the document and consequences of signing it. In most cases, you are waiving your legal rights to later seek the full amount of the damages which should have been covered by your policy, as well as prompt payment penalties and attorneys’ fees.

Step Six: Ask for Help

If at any time during the claims process you feel you are not being treated fairly, contact the Texas Department of Insurance, a public adjuster or, as a last resort, an attorney who focuses on representing policyholders.