State Specific Claims Handling Timelines
Mar 3, 2021
Texas’s 2021 landmark freeze led to catastrophic losses due to power and water outages and damage. The Texas Department of Insurance has posted bulletins governing vacancy and emergency licenses and is expected to issue additional bulletins extending insurance claims handling guidelines and deadlines. While we wait for those to be issued, here is your Texas claims handling deadline checklist, along with other Gulf Coast states timelines from other states which experienced significant power and water outages, including Louisiana, Mississippi and Alabama.
Texas’ Prompt Payment of Claims Act (Chapter 542.055 – .057)
- Acknowledge claim, commence investigation, request information within 15 days after notice of loss. For surplus lines carriers, this deadline is extended to 30 business days after notice of loss.
- Notify insured in writing of acceptance or rejection of claim within 15 business days of receive all items to secure final proof of loss before deadline.
- If additional time is necessary to investigate the claim, carrier must accept or reject the claim not later than the 45th day after notifying the insured in writing that additional time is necessary.
- If claim is accepted, pay claim not later than 5 business days after written notice to insured of acceptance. For surplus lines carriers, this deadline is extended to 30 days after written notice to insured of acceptance.
- Deadlines are extended for surplus lines policies.
Texas Insurance Consumer Statute (Chapter 542A)
- Applies to claims arising from forces of nature
- Governs the content and timing of a notice letter to a carrier for damages and reasonable and necessary attorneys’ fees
- Notify insured not later than 30 days after receiving a notice letter of a request to inspect, photograph or evaluate property
Failure to strictly comply with claims handling deadlines will result in imposition of interest and reasonable and necessary attorneys’ fees.
Louisiana Claims Handling Checklist (Louisiana Rec. Stat. 1892)
- Initiate loss adjustment within 14 days of receipt of notice of loss
- Make written offer to settle property damage claims within 30 days of receipt of satisfactory proof of loss
- Pay all claims due within 30 days of receipt of satisfactory proof of loss
- Note: if a portion of the loss is in dispute, the insurer must pay undisputed portion within deadlines
Failure to strictly comply with claims handling deadlines will result in automatic penalties of 50% of the amount found due to the insured. Attorney’s fees are recoverable.
Mississippi Claims Handling Checklist (MS Code 83-9-5)
- Furnish forms for filing proof of loss within 15 days
- Pay all undisputed benefits for electronically submitted claims within 25 days of receipt of proof of loss
- Pay all undisputed benefits for paper submitted claims within 35 days of receipt of proof of loss
- Pay remaining undisputed portion of the claim within 20 days of receipt of additional supporting documentation
Failure to comply will result in consequential damages and attorney’s fees.
Alabama Claims Handling Checklist (Ala. Admin. Code 482-1-125)
- Acknowledge receipt of claim within 15 days
- Provide necessary claim forms, instructions or reasonable assistance to first-party claimants within 15 calendar days from receipt of claim
- Advise insured of acceptance or denial of the claim within 30 calendar days after receipt of properly executed proof of loss
- Reply to all pertinent written communications from insured within 15 calendar days from receipt of communication
- Pay all claims within 30 days of acceptance of liability
Failure to comply will result in consequential damages.