How do insurance companies pay out claims?
This is a process that can take days to sometimes years. The normal claim process can take 15 to 45 days.
Policyholder makes a claim
- Insurance companies steer policyholders to make claims over the phone.
- This is because policyholders may not receive benefits under Texas Insurance Code 542 for insurance companies late paying insurance claims until a policy holder makes a claim in writing.
The insurance company starts an investigation
- This generally consists of inspecting the property
- This can include taking an examination under oath
The insurance company accepts or rejects the claim
- This has to be done in writing
- The insurance company can accept a portion of the claim and reject the rest
It is unfortunately that insurance companies have a very strong lobby (Texans for Lawsuit Reform) that has made few penalties for insurance companies intentionally denying or delaying payment of valid insurance claims. Policyholders should also note that any payment of insurance claims is not a "settlement," and this is a term that is often incorrectly used. It is important to note that Texas Insurance Code 541.060 prevents insurance companies from requiring a homeowner to sign a release when they pay their claims. Insurance companies very frequently underpay and deny valid insurance claims. In addition, homeowners have rights to contact an attorney. Many times these claims are resolved without filing a lawsuit.
Here are some questions you should ask yourself:
- Has it taken over two months for the insurance company to make an evaluation?
- Does it feel like the insurance company is intentionally delaying the process?
- Are the requests made by the insurance company reasonable?
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