First Party Insurance Claims

An insurance policy is a contract between two parties – the insured and the insurance company – wherein the insured pays their premiums on time and the insurance company agrees to evaluate and pay any claims for loss. The insured (also referred to as the policyholder, which can be a person or a business) is generally known as the first party. A first party insurance claim is made by a policyholder against their own insurance carrier. The most common types of policies under which policyholders file first party insurance claims are typically health insurance claims, life insurance claims, homeowner’s claims, and storm damage claims; however, a variety of common causes of property damage often trigger these claims, including:

• Lightning
• Pipes bursting
• Smoke
• Hail
• Fire
• Electrical problems
• Storm and flood waters
• Wind from tornadoes and hurricanes
• Explosions
• Vandalism

First party insurance claims exist to protect policyholders who rightly pay their premiums from being mistreated by their insurance companies. When an event causing damage or loss takes place and the insured files a claim, if valid, the insurance company should pay the claim to cover the loss according to the policy terms. However, the claims process is rarely, if ever, this straightforward. Even a properly handled claims process can take a long time and involve a lot of different people like adjusters, claims representatives, and even lawyers. Since insurance companies are in the business of making money, they have internal policies designed to pay as little as possible to claimants so that the insurers can continue to turn a profit. Damage claims amount to billions of dollars every single year for insurance companies, so they are financially incentivized to pay you less and/or deny your claims for damages.

While insurance companies have the right to investigate claims, many carriers use bad faith tactics to avoid paying claims. When this happens, an insurance lawyer can help you with your case. Why should an insured sue their insurer? For a variety of reasons, including that the insurance company:

• Misrepresented the terms of its policy
• Failed to conduct a reasonable claims investigation
• Failed to settle a claim with clear liability
• Failed to provide a reasonable explanation for the denial of benefits
• Refused to pay a claim without investigating it
• Failed to adopt reasonable claims investigation standards
• Unreasonably delayed the payment of a valid claim
• Blamed the loss on anything other than the real cause
• Told you not to hire a lawyer
• Made threatening statements

All of these practices constitute bad faith conduct under the Texas Insurance Code, meaning they are legally prohibited. If you experience any of these bad faith tactics, you need to immediately contact an experienced lawyer. While insurance companies never rush to pay claims, they also often take advantage of the fact that most policyholders are completely unaware of their legal rights.

In addition, The Texas Department of Insurance (TDI), which helps regulate insurance companies has adopted a Bill of Rights to dictate time limits including the following:

• In Texas, your insurance company must acknowledge receipt of your claim within 15 calendar days and request any additional information related to your claim within that same timeframe. Within 15 days after receiving all requested information, your insurer must approve or deny the claim in writing.
• Texas law does allow your insurance company to extend this deadline by up 45 days if it notifies you that more time is needed for reasonable purposes.
• After notifying you that a claim has been approved, the insurer must pay your claim within five business days.
• If your claim is the result of a weather-related catastrophe or other major natural disaster as defined by TDI, your insurance company may take an additional 45 additional days to approve or deny your claim and an additional 15 days to pay your claim.

If you are frustrated with the claims process with your insurance company, Danny Ray Scott and Gulf Coast Insurance Lawyers can help. If you have suffered a loss due to hailstorm or hurricane damage, or another natural disaster, contact us today for a free consultation. Our policyholder rights lawyers exclusively handle first party insurance cases, meaning our team is dedicated to representing the insured. We believe you deserve the full value of your loss from your insurer and we will fight to get you paid what you are due.