When an insurance company refuses to respond to a claim

On Behalf of | Feb 23, 2024 | Uncategorized |

Insurance coverage exists to limit personal liability and help people and businesses recover effectively after incurring sudden, catastrophic expenses. Homeowner’s insurance, for example, can help people replace the damaged roof after a major storm. The work on the property could potentially cost tens of thousands of dollars in more extreme cases and might be a burden without insurance.

Thankfully, the right kind of coverage can pay some or possibly all of the costs to repair a home after weather causes property damage. Most mortgage companies require homeowner’s coverage to protect the property and the company’s investment. Even those who have paid off their homes usually maintain insurance coverage to protect against unpredictable expenses.

Homeowners in need of insurance funds often assume that the claims process should be fast and simple. However, insurance companies are not always cooperative when someone needs financial assistance to repair their residence. What happens when an insurance company refuses to respond to a claim after a homeowner submits paperwork?

The homeowner can take legal action

Both federal statutes and Texas law include statutes regulating the insurance industry. There is an expectation that insurance providers should always uphold their policies in good faith. When insurance providers deny reasonable claims or break the rules for claims processing, they may open themselves up to litigation.

Bad faith insurance lawsuits can compensate property owners previously denied coverage and can impose penalties on insurance providers who have not followed the law. In Texas, standards for insurance claims are relatively clear. The state imposes a claims processing timeline.

The homeowner who needs to repair their property should notify the company and request appropriate paperwork. The insurance company has 15 days to confirm it received that initial inquiry. Then, the homeowner must submit the official paperwork required by the insurance provider. At that point, the clock begins ticking. Insurance companies only have 15 days to respond to claims under Texas law.

If the company rejects the claim, it must do so in writing and provide an explanation for why. Policyholders then potentially have the option of appealing the denied claim. When the insurance company has stonewalled a policyholder or refused to respond to submitted paperwork, that may constitute bad faith insurance practices.

A policyholder could theoretically take legal action against an insurance company. A bad faith insurance lawsuit can force an insurance provider to address a claim appropriately and can help homeowners obtain the compensation they need to repair their property or cover the cost of repairs already completed.