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First Party Insurance Claims for Property Damage

This page concerns first-party insurance claims for property damage.  Visit our other pages to learn about first-party insurance claims involving underinsured and insured motorists or personal injury protection and medical payments coverage.

A first-party insurance claim is between the person who holds the insurance policy and their own insurance company. In contrast, a third-party insurance claim is one where three individuals are involved. The third-party individual makes a claim to the first-party’s insurance company.

First-party property refers to assets or belongings directly owned or insured by an individual or entity. In insurance terms, it typically denotes possessions or real estate covered under one’s insurance policy.

For instance, in the context of insurance claims, first-party property can include a homeowner’s residence, personal belongings, or structures on the property.

An illustrative example of first-party property is when a homeowner faces a scenario such as fire damage to their residence. In such cases, the homeowner invokes their insurance policy to file a first-party insurance claim, seeking coverage for the incurred damage and necessary repairs.

The insurance provider evaluates the policy’s terms and compensates the homeowner accordingly for the eligible losses or damages to their first-party property.

The following are examples of common first-party property insurance claims:

  • Commercial and Residential Insurance Claim Examples:
    • Hailstorm
    • Windstorm
    • Hurricane
    • Fire
    • Water
    • Tornado
    • Foundation or Structural damage
  • Automobile Insurance Claim Examples:
    • Flood
    • Vandalism
    • Hail

Knowing the difference between third-party and first-party property insurance claims is important. An experienced first-party property insurance attorney can help you maximize your first-party property insurance claim.

Texas Homeowners Insurance Claim Laws

Texas homeowners insurance claim laws can be complicated. Depending on the facts, each case could assert up to three different causes of action against a first-party property insurance company for improperly adjusting an insurance claim

Breach-of-contract, bad faith, and violating the Texas Prompt Payment of Claims Act.  Our goal is to make our clients whole while forcing the insurance company to pay for the costs of hiring an insurance attorney, as required under Texas law.

Under Texas homeowners insurance claim laws, insurance companies are required to adhere to specific timelines:

  1. Response Time: Insurance companies must respond within 15 days of receiving your claim in writing.
  2. Claim Processing: They must accept or reject your claim within 15 days of receiving any requested documents.
  3. Delay Notice: If there is a delay in processing your claim, the insurance company can take an additional 45 days, but they must provide you with written notice explaining the reasons for the delay.

How To Use Breach of Contract Against Your Insurance Company

An insurance policy is a contract between you and your insurance company.  In exchange for your premiums, an insurance company promises to pay benefits under your policy for covered damages that exceed a policyholder’s deductible.  

When an insurance company refuses to pay for covered damages entirely or underpays a covered insurance claim, breach-of-contract is a cause of action designed to make your insurance company pay the correct amount—or make you whole under your policy.

Additionally, both you and your insurance company have obligations under an insurance policy. These obligations are different depending on the insurance company and the specific policy, but an insurance company can breach an obligation under its policy as well. 

For example, an insurance company usually has an obligation under the policy to pay within a certain amount of time.  A failure to do so can also result in the insurance company breaching the contract.

How To Use Bad Faith Against Your Insurance Company

Besides the requirements in an insurance policy, insurance companies must also comply with Texas law. In Texas, insurance companies cannot adjust claims using unfair or deceptive trade practices

The focus of a lawsuit for bad faith is not only on the outcome of the insurance company’s adjustment, but the actions the insurance company took to get there.  We look at the insurance company’s actions or inactions it took and whether it followed its own policies or procedures. 

Some examples of unfair settlement practices are:

  • Misrepresent a provision in the insurance policy.
  • Failing to promptly and fairly settle a claim where liability is reasonably clear.
  • Failing to reasonably explain why the insurance company denial of a claim or offer to settle a claim.
  • Failing to make a claims decision within a reasonable amount of time.
  • Refusing to pay a claim without conducting a reasonable investigation.
  • Failing to adopt and implement reasonable standards for the prompt investigation of claims.
  • Forcing a policyholder to file a lawsuit to recover an amount due under a policy by offering substantially less than the amount ultimately recovered in a lawsuit.

Our Houston insurance lawyers will help explain these terms and evaluate your case for free.

Understand the Texas Prompt Payment of Claims Act

Insurance companies must also investigate and pay first-party insurance claims in a timely fashion by law. While the law is titled “Texas Prompt Payment of Claims Act” it imposes obligations on insurance companies beyond payment. For example, insurance companies must meet the following deadlines when adjusting a claim in Texas:

  • Within fifteen days of receiving notice of a claim, an insurance company must:
    • acknowledge receipt of the claim,
    • commence any investigation, and
    • request any items, statements, and forms required from the policyholder.
  • Within fifteen days after receiving from the policyholder all required items, statements, and forms, the insurer must give notice that it either:
    • rejects the claim, or
    • accepts the claim.
  • If an insurance company rejects the claim, it must explain its reasons why.
  • If an insurance company accepts the claim, it must pay within five business days. 

Depending on the particular Texas prompt payment of claims act violation—and whether the insurance company accepted or rejected the claim—an insurance company may owe statutory interest and attorney’s fees.

Don’t Miss Out on a Proper Payout – Contact Our First-Party Property Attorney Today

Our Houston first-party property attorney is here to help you receive the compensation you deserve. Let our insurance lawyers manage the insurance companies on your behalf. We know how to navigate first-party property insurance claims and will help you receive the compensation you deserve.

At Armstrong Lee & Baker LLP, we understand how serious a broken agreement can be, which is why we are dedicated to helping you and your partners. If you have suffered a broken contract and believe you deserve compensation we urge you to contact our law office today to schedule an appointment for a free case evaluation. Call 832-402-6637.