Hurricane Harvey: Time Requirements

September 1, 2017

Butler stands ready to assist you with Hurricane Harvey’s claims in Texas.

Harvey’s CAT 4 winds devastated Rockport, TX, and the surrounding area. Flooding has been catastrophic. As the flooding and rains subside, insurers are receiving many thousands of property insurance claims.

Throughout the next few months, Butler will send you information that may be useful to your handling of Harvey’s claims. We will make this information as easy to review as possible because your time is important.

Speaking of “time,” Texas law requires insurers to obey specific time requirements in the handling of claims. We have listed a few claims-handling time requirements below. Note that the statutes often reference “days” and “business days.” For clarity, we substituted “calendar days” for “days” in our discussion of statutory time periods. Follow the hyperlink for the actual text of the statute.

Note that you can add 15 calendar days to the claim handling deadlines listed below because Hurricane Harvey is undoubtedly a “weather-related catastrophe or major natural disaster as defined by the commissioner” and therefore the additional time is allowed. See Tex. Ins. Code § 542.059(b) & 28 Tx. Admin Code §5.9303(c)(2). http://codes.findlaw.com/tx/insurance-code/ins-sect—542—059.html & http://txrules.elaws.us/rule/title28_chapter5_sec.5.9303

1.  After receiving notice of a claim, within 15 calendar days you should: a) acknowledge receipt, b) begin investigating, and c) request necessary information. You can ask for information later as the need arises. If you are a surplus lines insurer, you have 30 business days to do all of this. See Tex. Ins. Code § 542.055. http://codes.findlaw.com/tx/insurance-code/ins-sect—542—055.html
   The statute does not say that a written acknowledgment to the insured is required, but we recommend writing the insured, as well as calling, to confirm receipt. Instead of a letter to the insured, you can record the “date, manner, and content of the acknowledgment,” presumably with a claim file note.
2. Acknowledge with “reasonable promptness” communications from your insured. Acknowledging within 15 business days is “reasonably prompt.” This “reasonably prompt” presumption time period is not enlarged because of Harvey, but the circumstances surrounding this catastrophe should factor into what is considered “reasonable promptness.” 28 Tx. Admin. Code § 21.203(2). http://txrules.elaws.us/rule/title28_chapter21_sec.21.203
3. Notify your insured in writing that the claim is accepted or rejected within 15 business days of receiving required information (“items, statements, and forms”) to secure final proof of loss. Tex. Ins. Code § 542.056(a). http://codes.findlaw.com/tx/insurance-code/ins-sect—-542—056.html
   Or, within that same period, write to your insured that you cannot yet make a claim decision and explain the need for more time. You will have 45 additional calendar days to notify the insured of the decision. Tex. Ins. Code § 542.056(d). http://codes.findlaw.com/tx/insurance-code/ins-sect—542—056.html
4. If the claim is rejected, state the reasons for rejection. Our advice is to be as specific and transparent as possible about the reasons. Tex. Ins. Code § 542.056(c). http://codes.findlaw.com/tx/insurance-code/ins-sect—542—056.html
5. If you agree to pay the claim or part of the claim, pay within 5 business days of your written acceptance. If payment depends on an insured performing an act, payment is due within 5 business days after the act. Surplus lines insurers have 20 business days to pay after written acceptance or after the act. Tex. Ins. Code § 542.057. http://codes.findlaw.com/tx/insurance-code/ins-sect—542—057.html
6. Damages can be awarded for violation of payment deadlines. Tex. Ins. Code §§ 542.058 & 542.60. http://codes.findlaw.com/tx/insurance-code/ins-sect—542—058.html. http://codes.findlaw.com/tx/insurance-code/ins-sect—542—060.html. On September 1, 2017, new and significant insurance code provisions will affect lawsuit filing requirements and statutory damages. We will discuss those provisions in the coming weeks.