Prompt Payment of Claims
Prompt Payment Penalties
Insurance contracts and Texas law require prompt payment of insurance claims within specific deadlines. Texas law generally provides for an 18% per year penalty for a first party claim that is improperly denied or delayed (except for storm related claims). At our Dallas law firm, we focus on making insurers comply with the prompt payment requirements. We have been helping clients recover penalties and damages for not complying with Texas law on prompt payment of insurance claims.
Slow and underpayment of claims as well as wrongful denial of claims is a violation of the Texas Prompt Payment Statute. The law requires insurers to acknowledge receipt of the claim within 15 business days and to provide notice of acceptance or rejection of the claim within 15 business days following receipt of all necessary information. An insurer must pay an accepted claim within five days of sending the notice of acceptance. If an insurance carrier does not meet these deadlines, it is liable for penalties, significant annual interest on the claim amount (depending on the type of claim), attorney’s fees and court costs.
Details About the Prompt Pay Statute
The Texas Prompt Pay Statute applies to many types of claims, including homeowners’, commercial, life, PIP (Personal Injury Protection), health insurance and disability insurance policies (not ERISA) among others. The statutory deadlines are very clear and liability is strictly imposed. Insurance companies have almost no legal excuses to avoid prompt pay requirements. If an insurance company fails to pay on a covered claim promptly, it may be liable for the penalties, 18% annual interest (for non-storm damage claims), attorney’s fees, and costs of court.
Excuses Offered by Insurers
Insurance companies do not like the legal consequences imposed by the Texas Prompt Pay Statute and try almost every legislative session to have it watered down or eliminated. In order to avoid the consequences of this law, insurers offer various excuses. Among the most popular excuses, insurers accuse their insureds of not cooperating or not providing the information the insurer claims it needs to make a decision on whether to pay a claim. More often than not, the insurer is fishing for information not relevant to the claims decision in order to delay or refuse payment. An insurer will desperately attempt to find a reason not to pay timely by asserting it is still “investigating” in hopes of drumming up a reason later not to pay.
An experienced and knowledgeable Texas insurance lawyer can expose and discredit an insurer’s excuse not to pay promptly and collect the damages and penalties for a prompt pay violation. The Law Office of Mark A. Ticer regularly holds insurers accountable, including compensating insureds promptly for prompt pay violations.
Breach of Insurance Contract Equals Prompt Pay Violation
We understand the legal issues involved for prompt pay requirements. Slow or underpayment (or no payment) can be a breach of the insurance contract. A breach of the insurance policy also may mean violations of the Texas Prompt Pay Statute entitling an insured to additional damages. As an insurance litigation attorney, Mark A. Ticer understands the issues involved in insurance breach of contract disputes and how they can impact the Texas Prompt Pay Statute. His skill and experience in insurance matters has served our clients well in matters arising from slow payment, underpayment, and denial of covered claims. Our firm has successfully obtained benefits for many clients for prompt pay violations.
Contact our Dallas law firm to discuss your case free of charge. We assist clients with matters arising from the slow payment of insurance claims throughout the State of Texas.