Friday, August 25, 2017

Hurricane Harvey First Party Property Claims Checklist (Texas)

With the Arrival of Hurricane Harvey, Insurers Should Keep in Mind the Following Texas Insurance Code Claim-Handling Guidelines  
  • Acknowledge claim in writing and commence investigation within 15 days. § 542.055
  • Request all necessary items from insured and provide instructions and blank proof of loss forms for insured to complete. § 542.055
  • A reservation of rights should be issued as appropriate.
  • Accept claim, reject claim, or state in writing additional time is needed, explaining why more time is needed to conduct an investigation within 15 days. § 542.056
  • If additional time to investigate claim is requested, accept or reject claim within 45 days after the notice requesting additional time is provided. § 542.056(d)
  • Make payment within 5 business days after acceptance of claim. § 542.057(a)
  • The claim-handling deadlines above can be extended by 15 days in the event of a weather-related catastrophe or major natural disaster as defined by the insurance commissioner. § 542.059(b)
  • Failure to comply with any of the deadlines set forth above can subject an insurer to statutory penalties of 18% per year on the amount of the claim, plus reasonable attorney’s fees even if there is a good faith basis for not paying the claim. § 542.060 (effective through August 31, 2017, amended by H.B. 1774) 
Some Additional Issues to Consider:  
  • Civil Authority – Mandatory evacuations have already been issued in several Texas counties.
  • Service Interruption – Power and telephone/cell service may be disrupted.
  • Sue and Labor – Businesses may shut down operations in advance.
  • Adjuster licensing – Texas requires all adjusters and public adjusters to be licensed in the State of Texas. There is a provision for emergency licensing of adjusters in the event of a catastrophe.
  • Flood hazard zone areas—Areas identified on the Flood Insurance Rate Map can change so be aware of applicable policy limits by hazard zone.
  • Flood and Wind sublimits

Click here for a PDF version of this checklist.

Posted by Thomas Cook and Jason Reeves