Texas Policyholder Advocates
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Texas Insurance Claim Tips

insurance claim settlement tips

Texas Policyholder Advocates urge owners of insurance policies to take the appropriate steps to avoid settlement complications by reviewing these insurance claim settlement tips.

  1. As soon as reasonably possible, notify your insurer that you have a claim.  Write down the claim number and use it in all communications.
  2. Mitigate damage.
  3. Make sure you have a copy of your policy, all endorsements, and understand the policy language.
  4. Give your insurance company a chance to do the right thing, but don’t mistake a friendly representative for a friend.  Do not make permanent repairs until the insurance adjuster has inspected your property and confirmed they have completed their investigation and you are satisfied with the outcome of your insurance claim.
  5. You have the right to control and select who does your repairs.  Do not sign over your claim to a contractor or restoration company. Carefully review any restoration contract and do not authorize any repair work until you get written approval from your insurance carrier. You can have a restoration company clean-up the immediate mess but are not required to have them also do the repair work. Make sure you maintain control of your insurance payment.
  6. Be aware:  Texas does not license roofers or contractors.  It is illegal for roofers or contractors to negotiate insurance claims per HB 1183 
  7. Be sure to continue to pay your insurance premium and mortgage!
  8. Be pro-active but patient in the claim process; it takes some time and patience.
  9. Be aware: Most consumers are not on a level playing field when dealing with an insurance claim.  The insurance companies employ adjusters on who work on their behalf.  Insurance is a business.  Insurance companies wrote your policy, their claim process and deal in the business daily.
  10. Policyholders have the right to hire a public insurance adjuster who exclusively represents and works on your behalf.   Contractor and/or restoration company contractors are not authorized to represent you in claims negotiations and your insurance company knows it.  The big difference is in the eyes of the insurance claim marketplace is a contractor is a vendor and a Public Insurance Adjuster is an agent for the insured.  Good contractors are very important in helping to determine the scope the reconstruction project.  Settling your insurance claim is a process all in its own.  See TDI commissioner's bulletin #B-0017-12.
  11. Think of your insurance claim settlement as a business negotiation—you’re dealing with a for-profit company.
  12. Document and support your claim with proof, details and estimates.  Take extensive photos and video of damage.
  13. Present clear requests in writing that explain what you need, when you need it, and why you’re entitled to it.
  14. If you don't understand something, ask.
  15. Don’t pad or exaggerate your claim.
  16. Don’t sign legal documents without consulting with a qualified attorney.
  17. Try to resolve problems informally but complain in writing, go up the chain of command and/or use Texas Department of Insurance agency for help when necessary.
  18. Review your entire policy(ies) for coverage and endorsements.   Interpretation of policy and scope of loss can make or break your insurance claim settlement results.
  19. Don’t feel forced to use the contractors your insurance company recommends. Get independent line item estimates for repairs from at least 3 reputable contractors. It’s your property and you should control who does the work and the quality of the work. Sometimes insurers hire contractors based on cost only and you may not get the quality restoration work you require.
  20. Review Questions to Ask Any Texas Roofing Contractor BEFORE You Let Them on Your Roof
  21. Don’t allow any work to be done unless you have some written approval from you insurance carrier. They may refuse to pay the claim without prior approval. Make sure you get and keep everything in writing.
  22. Ask your insurance company for payments on any undisputed amounts of the claim until an agreement can be reached on the rest of your claim. This will help you get repairs started and avoid heavy out-of-pocket expenses.
  23. If you feel overwhelmed or intimidated by the process.  Insurance claims can be complicated, frustrating as well as time and financially burdensome.   If your insurance company is not offering you a fair settlement, consider hiring a public insurance adjuster to help before hiring an attorney.
  24. Public adjusters - be sure to review any public adjuster contract carefully.  Make sure they will meet with your adjuster, document your loss, impose deadlines, prepare your claim file, interpret and help you fulfill your duties under the terms of your insurance policy.  They are typically compensated on a percentage of your recovery.  Texas allows public adjusters to charge no more than 10% of your gross settlement, less your deductible. Hiring a public adjuster.
  25. Appraisal – Is a conditionally, reasonable alternative to a lawsuit.  Many Texas Policies differ in language.  Typical appraisal policy language may state as follows:  If the insured and the insurance company fail to agree as to the actual cash value or the amount of loss, then, on the written request of either, each shall select a competent and disinterested appraiser to review the claim value and policy coverage.  Each party will pay its chosen appraiser, bear the expense of an umpire equally.  A decision agreed to by any two of the three parties (insured appraiser, insurer appraiser, and/or umpire), will be binding as to the amount of loss.   Importantly, many Texas policies state that if there is an appraisal award the insurer still retains their right to deny the claim.  Typically, no formal discovery is conducted, including depositions, interrogatories, requests for admission, or other forms of formal civil discovery, no formal rules of evidence shall be applied, and no court reporter shall be used for the proceedings.
  26. Legal - There is no doubt that some claims necessitate the need for attorneys.   Lawsuits can be very time and financially consuming even if a lawyer is working on contingency, they typically charge 40% of a claim.  Importantly, bad faith damages are typically not awarded unless a case goes to trial.  Before a case goes to trial, typically formal discovery is conducted and mediation is required before going before a judge.  Be sure to ask any attorney you may consider how many claim lawsuits like yours have they taken through trial and if they are board certified in insurance law.
  27. Beware of Door Knockers!  Insurance claim handling practices in Texas impact consumers and the state insurance market.   Barratry aka "Claim Running" schemes perpetrated by unscrupulous attorneys, roofers, contractors, public adjusters and unlicensed individuals is unethical and illegal.  

Items Needed To Get Started….

All Claims

  1. Copy of insurance policy and/or Declaration Page
  2. Copies of vendor/contractor invoices, bids, payments, etc. on all repairs to date.
  3. Copies of any receipt for materials that we used for temporary, emergency, and permanent repairs.
  4. Copies of any correspondence with the adjuster, insurance agency, insurance company, etc.
  5. Copies of any claim reports prepared by any adjusters or their estimators.
  6. Documents that confirm the date of the original construction, blueprints, remodeling plans, etc.
  7. Adjusters contact information.
  8. Agent/broker contact information.
  9. Cause of Loss
  10. Date of Loss

For Business Interruption Claims

  1. Copies of the last three years income statements.  If we had a growth trend that can be supported from the last four or five years we will also need those financial statements.
  2. Copies of the rent rolls that shows occupancy trends for the last three years.  Same as two above, it the rent rolls were steadily increasing during the past five years then we need all the statements.

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