Our experienced Houston homeowners insurance claim lawyers at Haun Mena explain your options when a homeowner’s insurance claim is denied in Texas.
Why Insurance Companies Deny Homeowners Claims
Here are some reasons that insurance companies deny homeowner claims:
- Reasonable wear and tear. The loss is the result of wear and tear, and not a covered loss.
- Claim not covered. The policy does not cover the type of loss.
- Exclusions. The claim falls under a policy exclusion.
- Deductible. The amount claimed is below the policy deductible.
- Unpermitted work. Damage resulted from work performed by an unlicensed person or without the necessary permits.
- Deadlines. The insured missed the claim deadline.
- Documentation. There’s not enough supporting information to process the claim.
- Lapsed policy. The insurance policy has lapsed.
- Fraud. The insurance company believes fraud may have occurred.
- Someone else is at fault. Someone else was at fault, and their insurance should pay.
- Misrepresentation. An application for insurance had misleading information.
- Bad faith. The insurance company refuses to pay to increase its profit margin.
Texas law requires insurance companies to pay claims in good faith (§ 542.003). Still, insurance companies deny and minimize good claims to increase their profits.
Your Options After a Denial
A homeowner’s insurance denial is not necessarily the end of the road. Unlike health insurance, there is no formal appeals process built into most homeowners’ policies. What you can do is submit additional information and request that the insurer reconsider their decision, but there are no set rules or required steps governing that process, the way there are in other types of insurance.
Beyond requesting reconsideration, Texas law gives homeowners several other paths forward.
Texas law requires the insurance company to give reasons for denying a claim (§ 542.056). That gives you a starting point. Review those reasons carefully before deciding how to respond.
Requesting Reconsideration
You can respond to a denial by submitting additional information that addresses the insurer’s stated reasons for denying the claim. This is not a formal appeals process. The insurer is not required to follow specific steps in reviewing your response. They may reconsider, or they may not. However, it is important to think about this process as building a file – you have an opportunity to submit the evidence that helps your claim, which could help the litigation process later if it is necessary.
Useful documentation to include:
- Repair estimates
- Law enforcement reports
- Weather data
- Engineering reports and letters addressing causation
- Communication records with the insurance company
- Home inventory
- Policy language
When possible, try to send documentation using a method with tracking, like Priority Mail or Certified Mail Return Receipt Requested. Note that some policies may have specific methods of providing information to the carrier, but it is not typical when submitting additional information to support your claim.
Important note on timing: Pursuing reconsideration does not pause any legal deadlines. The clock on filing a lawsuit generally starts when your claim is denied. An attorney can help you manage those deadlines while your reconsideration is pending.
Other Options If the Insurer Won’t Budge
If the insurer declines to reconsider, you have several other options:
Appraisal
All Texas homeowners’ policies have an appraisal option (§ Tex. Ins. Code 1813.003). The appraisal process is defined by your insurance policy, and over the past several years, we have seen policies differ significantly regarding the appraisal process. In general, an appraiser involves each party designating a disinterested appraiser. Typically, they cannot be your contractor, public adjuster, or anyone with a financial stake in the outcome of the claim. The appraisers then attempt to agree on the amount of the loss. If they can’t agree, then a third-party neutral called an umpire decides the amount of the loss. The result is binding except in cases of fraud, mistake, accident, or lack of authority (§ 1813.004). Note: you pay for your appraiser and half the cost of the third, regardless of the outcome. Deadlines may apply concerning when an appraisal may be invoked and some of the requirements regarding how long each side has to pick an appraiser and an umpire after the appraisal process begins.
Public Adjuster
A public adjuster is a licensed insurance professional (28 Tex. Admin. Code § 19.708) who reviews your policy, documents damage, and negotiates on your behalf. They must work under a written contract and may not provide legal advice. Complaint
You can file a complaint with the Texas Department of Insurance (TDI). TDI will require the insurance company to respond and accept complaints about denials, payment amounts, and delays. They will not resolve factual disputes, such as the cause of damage.
Lawsuit
You may file a lawsuit for breach of contract or insurance bad faith. A 61-day pre-suit notice is typically required (§ 542A.003). A judge or jury will decide coverage and claim value, though many cases settle before trial. Where you file depends on the amount involved and other factors, including where the damage occurred and where the insurer is headquartered (§ 15.002).
When Hiring an Attorney Changes the Outcome
Get an attorney involved as early as possible, ideally before you respond to the denial. An attorney can help you present the strongest case for reconsideration from the start, and they understand the legal deadlines that could affect your ability to pursue further action if the insurer doesn’t change course.
Talk to a Lawyer
Haun Mena is a team of experienced lawyers. We handle denied homeowners’ insurance claims. Call or message us now.
