When you lose your home to a fire, how the insurance company handles your claim is extremely important. A total loss house fire claim should pay the compensation due under your policy – the compensation that you need to rebuild your home, and your life.
Total loss house fire claims in Texas involve several key issues:
- Declaring the home a total loss
- What you get paid if your home is a total loss
- What if the insurance company disputes the total loss for a house fire
- Bad faith by the insurance company, and how to fight it
At Haun Mena, we represent homeowners in total loss house fire claims in Houston. An insurance policy is a promise. We make insurance companies keep their promises. If you need help from a lawyer with coverage for a total loss house fire claim in Texas, contact us today.
What Are Total Loss Fire Claims?
A total loss fire claim occurs when a house is destroyed by fire. There are legal standards for when a house is a total loss and when the loss is only partial. The difference between total and partial loss is significant because it determines what the insurance company pays.
How Does Insurance Determine Total Loss After a Fire?
Insurance determines total loss after a fire by asking whether an owner, of reasonable prudence, would use the remnants to repair the house, or if they would completely rebuild it.
The question assumes that the homeowner wants the same structure they had before.
Insurance representatives should determine what a reasonable homeowner would do in the situation — would they repair the home, given what’s left, or would they start over from the ground up?
The question depends on the facts. Some homes are a total loss, while others can be partially salvaged.
If any of the existing structures are used to rebuild, is the house fire a total loss?
A house fire can be a total loss, even if some of the existing structure is used to rebuild the home. Total loss may be actual or constructive. A home doesn’t have to be completely burnt up in a fire to be a total loss. Even with some remnants, it may still make sense to completely rebuild.
What if a House Fire is a Total Loss in Texas?
In Texas, if a house fire is declared a total loss, the claim is a liquidated demand for the full amount of the insurance policy. The insurer must pay the full policy limit. The amount payable is the amount that the parties agreed to insure the home for before the fire.
When a house fire is a total loss, the parties don’t dispute what the home was worth after the fact. The amount payable was decided ahead of time when the parties created the insurance policy.
That’s why having the home declared a total loss is so important. When a home is a total loss, Texas law requires the insurance company to pay the agreed-upon amount. (Texas Insurance Code § 862.053). If the loss is partial, the insurance company may try to dispute the amount covered.
Having the right determination for a house fire – a total loss determination – can mean the difference between getting the compensation you deserve, and your claim being undervalued.
Note: Insurance laws vary by state. Liquidated demand for total loss house fires is the law in Texas. Be sure to check with the law of your state to know what to expect in your claim.
What about personal property in a total loss house fire?
The liquidated damages rule for total loss house fires applies to the structure only. How you’re compensated for personal property damage depends on the language and limits of your insurance policy.
Why does Texas have the liquidated demand rule for total loss house fires?
Texas uses the liquidated demand rule for total loss house fires to be fair to the insured party when a house fire causes a complete loss. Without the rule, the insurance company could over-insure a structure, charging higher premiums. Then, they could dispute the amount if a fire occurred. With the liquidated demand rule, the insured knows they’ll be fully covered for the insurance they purchased with their premium payments.
What if the Insurance Company Disputes Total Loss for a Fire?
Too often, insurance companies don’t keep their promises. They may dispute that the home is a total loss. They may say that a non-covered event caused the damage. If the insurance company disputes your claim, there are things you can do. Our Houston fire damage lawyers can help.
If the insurance company disputes the total loss for a house fire claim, you can take legal action.
You can take your claim to court to demand fair payment. You may have legal representation.
You must present the evidence to support that the house fire was a total loss. The jury decides the case. They determine whether a reasonably prudent owner, uninsured, would restore the home using the remnant. On appeal, the court reviews whether the record contains evidence to support the jury’s decision.
Bad Faith and House Fire Total Loss
Failing to declare a house fire a total loss may be bad faith by the insurance company. If the insurance company acts in bad faith, they may owe you penalties, interests, costs, and attorney fees. The purpose of bad faith laws is to give the insurance company a reason to do the right thing, rather than just fight claims to minimize payments.
Our attorneys can help you understand how much your bad faith insurance claim is worth.
Contact a Lawyer in Houston About Your House Fire Claim
Is the insurance company disputing your total loss house fire claim? Do you need help evaluating your case or taking steps to get the compensation you deserve? Contact us!
At Haun Mena, we help homeowners with total and partial loss house fire claims. We can evaluate your case, negotiate with the insurance company, and build the evidence. We take claims to court if necessary, representing our clients in hearings and trials.
To get legal help today, call 713-874-9216 or message us online now.
