Insurance can be a confusing topic. Many people want to know exactly what type of insurance they should purchase and how much. More questions arise when it comes time to file an insurance claim after an accident or property damage.
The law office of Abraham, Watkins, Nichols, Sorrels, Agosto & Aziz helps injury victims in the aftermath of a serious accident. We help clients seek maximum compensation and deal with insurance companies on their behalf.
If you are interested in speaking to one of our injury attorneys in a free consultation, please call 800-580-9121.
Otherwise, read the following for answers to frequently asked questions about insurance claims and coverage.
Q: As a personal injury attorney, what types of insurance coverage do you think all Texans should have?
A: Very good question. It's very broad so I am going to try to break my answer up into several categories. I want to talk first about auto insurance. As everybody knows, in the state of Texas, you must carry liability insurance by law if you are going to drive an automobile on the streets in Texas. Now today, as it stands, the minimum policy limits are 25/50. Now what that means is that each of us has to carry a liability policy, a policy that will insure us in the event that we cause damage to someone else for our liability the minimum policy limits right now is 25,000 per person and up to 50,000 per accident So as a start off, each of us have to carry, if we are going to drive, liability insurance. It is important because this means that if you cause an accident, your insurance company will cover your liability to others. Now this is the minimum amount the 25,000/50,000 - 25 per person 50 per accident. This is the minimum amount. But, in order to protect yourself you should always look at your risks, look at your assets, look what you have that could be seized in a judgment and try to get as much coverage as you can afford. In addition to the liability portion of your auto policy, I want to also talk about personal injury protection benefits. Now personal injury protection benefits come with your auto policy. In order for them to not be there, you will have had to specifically exclude the personal injury protection coverage at the point you got your auto policy. Now most people don't know what this is but essentially, this is no fault insurance that will protect you and cover your medical bills and your lost wages if you are injured in an accident. Now what makes this unique is that it's no fault; meaning that if you are in an auto accident and you rear end someone else, so even though it's completely 100% your fault, but you bang your head on the steering wheel or you hurt your back and you incur hospital bills, your personal injury protection benefits will cover your own hospital bills and some lost wages up to the policy limits even when you're at fault. So this is an absolute must for every Texan if you're going to be driving on our streets; from the standpoint of not only do you want to protect yourself from liability but you also want to protect yourself from your own medical payments that you may have to make or lost wages. Now you don't have to get the minimum here but the average that I've seen is $2,500 minimum that most people have on their policies. This limit you can increase and it's actually quite economical to increase it I've seen several of my clients having personal injury protection limits up to $100,000 that really did not have an impact on their premiums that they pay each month. However, for one particular client of mine, she was in a terrible accident, she's probably 50/50 at fault meaning she probably caused half of the accident, this type of coverage is absolutely vital. And what goes along with personal injury protection, or as we call it in my industry we call it PIP, it's what the insurance industry calls it as well, but you also want to have under insured/uninsured motorist coverage. Now you'll hear this referred to as UM/UIM. And just like personal injury protection, just like PIP, UM/UIM coverage is on your policy unless your specifically excluded it Now what this type of coverage does is it's going to cover you in the event that you're injured in an accident and the other driver is at fault but the other driver does not carry enough liability insurance to cover your damages. For instance, let's suppose that the driver rear ends you, he's DWI but he's carrying a 25/50 liability policy meaning $25,000 per person injured but you've got $100,000 in medical bills. Now you can get the $25,000 from the defendant driver and you'll probably get it pretty quickly because he's DWI, but you've still got $75,000 in medical bills that are unpaid in addition to your pain and suffering, lost wages, etc. But let's just focus on those $75,000 that are in unpaid medical bills. If you have UM/UIM protection up to say $100,000, your UM/UIM coverage will cover the difference. That is the difference between the $25,000 that the defendant driver has and your $100,000 in medical bills. There's a $75,000 difference there but your own policy will step in and cover those medical bills. Now this is in addition to PIP and in addition to the liability limits that you can get from the defendant driver. Now on the flip of that, let's suppose you get hit by that same DWI driver but he has no insurance. He just absolutely does not have coverage, he's violating the law, he or she and you're in a situation where you've got a lot of medical bills but there's no coverage for the defendant. Just like in the situation where they didn't have enough insurance coverage, the UM portion will kick in at the point when you're injured in an accident by a driver who doesn't carry liability insurance. So this is what I would call the third prong of your auto policy - you've got the liability prong, the PIP prong and then the UM/UIM prong. But the PIP and UM/UIM prong are designed to protect you and cover your bills and expenses in the event that you're injured in an accident. Now that pretty much covers the auto policy parts that I think are essential. But being that we all live in the gulf coast, very close and right down hurricane alley essentially, if you're a homeowner or a business owner, I think it is absolutely vital that you have some sort of windstorm coverage to protect either your home or your business in the event of a hurricane. Because as we've all seen, the hurricanes seem to be coming with more frequency and it doesn't look like they're going to be letting up and it's absolutely vital that you have some sort of coverage to what we call windstorm damage. Whenever one of these hurricanes hits or a named storm or a major tropical depression, etc, the argument always comes down to was your damage caused by wind driven rain or was your damage caused by flood? And in order to get the flood coverage, you're going to have to go through the government. But you can get windstorm, wind-driven rain, we call it windstorm coverage through your either homeowner's policy or through your business owner's policy or a business account packages policy. But in any event, that's one that I feel very strongly about it You absolutely must have windstorm coverage if you're living either in the gulf coast or operating a business in the gulf coast.
Q: So what happens after a hurricane? What does the wind do?
A: Well that's a great question. Let me give you a little bit of background on what happens from the insurance company's side. We all know that the insurance company will gladly take your premiums every month, they'll gladly write you a policy. But what happens in the event of a major storm, like a hurricane, is essentially the insurance companies have written more risks, they've insured more locations than they're really adequately able to cover in the event of a major catastrophe. So what happens when a hurricane hits is you will literally have adjusters being flown in, insurance adjusters, independent adjusters, people who will work for the insurance company that are flown into the state what we call storm chasers and their job is to get out and adjust your claims, look at your damage and report to the insurance company. Now what's important is that before a hurricane hits, as a business owner or a as homeowner, it is imperative that you look at your policy, determine what type of coverage you have. If you don't know, I recommend you write your insurance agent who sold you the policy, call them, call the insurance company. You want to find out do I have windstorm coverage. You want to know the answer to this before a hurricane hits and certainly not after. Essentially, if you do have the coverage, when a hurricane hits the first step is going to be reporting a claim to your insurance company.
Q: And how does somebody report a claim?
A: Before you report a claim, again, you're going to want to look at the policy. Your insurance policy will likely have information on it that defines the insured that means you the policyholder, there will be a section within every policy that defines the policyholder's duties. What are you supposed to do after an event, after a catastrophe, after a peril or a loss that was caused by an insured's peril. What you wanna do is first and foremost you want to call the insurance company if you've got a 1-800 number on the back, you want to call the insurance company and report your claim directly the your insurance company. Now this is not your insurance agent. This is not the person that you met with at the agency who sold you the policy. This is the actual underwriter who's on your policy. So what you're going to want to do is make sure you have a copy of the policy, go to the section that deals with how do I report a claim, call mat number, get a claim number, but what's so important is that you must follow-up in writing. So many of these policies these days are mandating that notice must be given in written form. Now some of the courts will excuse this, some of them won't. But what's most important to protect yourself as an insured is not only do you want to report the claim, you want to write them and give them written notice of your claim. By reporting it over the phone, you can get a claim number, you can get confirmation that a person has heard you but I would immediately follow that up with a letter to the insurance company stating the claim number, if you got it from the telephone call, and again giving them notice of the loss location, who you are and doing it in written form. To be extra sure, I would follow-up after reporting the claim both by oral and written notice to the insurance company in addition to that, I would follow-up and report the claim by both oral and written notice to the insurance agency. Now this is the company or person who actually brokered you or sold you this policy. Now most people, they do all their contact with the insurance agency. They never actually communicate with the insurance company; rather all their communications are done through their insurance agent Now that's fine and that's actually the normal practice for most people but in order just to protect yourself in this situation, I would recommend written and oral notice to the insurance company and written and oral notice to the insurance agency including your particular agent. This way there can be absolutely no argument that you failed to comply with the notice provisions in your insurance contract. And trust me, the insurance company is looking at every term to deny your claim for any reason they can find. Now that may even be some small technicality in the contract. Trust me, I do this for a living. I've seen them fight this tooth and nail on the smallest thing. Be sure you check your policy. Be sure you give them written notice. Be sure you give it to both the insurer and to the insurance agency.
Q: What if they do deny your claim? What happens then?
A: In that situation where your claim gets denied, you absolutely need to consult a lawyer. The Texas Insurance Code lays out exactly what the duties are of an insurance company following the reporting of a claim. Now the way it works is after you've reported your claim to the insurance company there are certain deadlines that are laid out by the Texas Insurance Code in which they must acknowledge receipt of your claim, they must request additional documents, they must request additional information and if they are going to deny your claim, they've got to send you written notice stating specifically what the reasons are that they're denying the claim and what they base that off of. From there, you've got a document that's going to tell you exactly why they're denying the claim and what they're looking for. If you can get that document to your attorney or have an attorney who does free consultations take a look at what's called either a reservation of rights letter or an outright denial, your attorney can have a good idea at that point whether or not there's any bad faith involved and whether not this may an action that you can bring in the courts to seek regress. Now in Harris County, especially in Harris County and Galveston County, we've seen a large amount of insurance what we call delay and denials. Now it's also a violation for the insurance company to delay payment of your claim. The Insurance Code lays out with specificity how much time they have to do certain things. So it's imperative that you keep a written log, keep a document file in which everything you mailed to the insurance company you keep in there, everything you've received from the insurance company you keep in there so that your attorney can evaluate whether or not the insurance company has met all the time lines that are laid out in the Texas Insurance Code. This is one of the few statutes that's actually in favor of consumers, in favor of insured, regular people in Texas. The Texas Insurance Code has very good terms to help the consumer, to help the policy holder. And it has some very strict time lines for the insurance company with very harsh penalties in the event that they cannot comply. It's important to keep a file, it's important to keep your hands on every document you've sent or received from the insurance company.
Q: What if the insurance doesn't do what they say they'll do?
A: Again, you're finding yourself right back in what we call bad faith. When you hear an insurance lawyer talk about insurance bad faith, what that means is that the insurance company has either delayed or denied paying a claim when then-liability has become reasonably clear. That means that they should have paid it already, a reasonable insurer would have paid it and they just haven't done so. At the point they do that, they've engaged in bad faith. Now that's common law. hi addition to that, there's a whole host of statutory violations that we would call, essentially it's anytime an insurance company, an adjuster or agent misrepresents a policy, states that there's a coverage, states any type of misrepresentation with regards to a claim or coverage. Any type of, it doesn't even have to be an intentional lie, if they tell you something that turns out to not be true, that's bad faith and its actionable. And what's so important for everybody across the state of Texas is anytime there's an insurance violation, the consumer, the policyholder automatically gets their attorney's fees so it will not cost you to bring a claim against these insurance companies because the Texas legislature has provided for that by allowing you to recover your attorney's fees if you can show even the smallest violation. Essentially, if the insurance company doesn't do what they say, you need to contact a lawyer immediately and you need to find a lawyer who's experienced in handling insurance bad faith claims so that you can make sure that you get everything you're entitled to with regards to this claim.
Q: What are the main pitfalls that people run into with insurance claims?
A: From my standpoint, I think the main pitfalls that people run into is just they don't read their policy. I understand that these policies are difficult to read, even for lawyers. It takes us a long time to go through these policies and they cross-reference different places and there's an endorsement here that must be attached and oh what about this exclusion, it does get pretty complicated. But as a reasonable person, you do need to have some familiarity with what type of coverage you have and with your policy because I'll tell you why. The Texas Supreme Court has already held, they've already come out in a case and told us, that under Texas law the policyholder is deemed to have knowledge of then-policy. Now that's a pretty scary proposition when these insurance policies are pretty lengthy, written in legalese and their referencing all sorts of exclusions and endorsements. But that's the law in Texas. So at the very minimum, you need to know what type of coverage you have. You need to know how to assert your rights and I think we talked about some of that today. But if you want to make sure and if you're not sure what type of coverage you have, the best way is to send written request to your insurance agent that sold you the policy simply asking do I have windstorm coverage? Force your agent to send you something back in writing telling you yes or no. That's going to come in handy down the road. Keep everything with your insurance policy. Keep it with your file. In addition to generally policyholders not reading the policy, I've seen this time and time again and that's why I wanted to talk about how to report a claim properly. Essentially what I've seen is multiple policyholders not complying with the insurance company's policy. Say the policy requires written notice and the policyholder never sends written notice. They simply call it in on the 1-800 number. Now you may have an argument to be made later that the insurance company had notice, they suffered no prejudice and therefore shouldn't allowed to rely on the strict compliance of written notice with the policy. But, why get into mat fight? Just to make everything simple, clean and to flow smoothly, comply with the terms of the policy. Now the other thing I've seen quite often is the insurance company comes out, they look at the risk, they look at the loss location and then they start requesting documents from the policyholder. At that point, the policyholder is not as quick to get them the information that they needed. The policyholder may even be the reason there's a delay. The policyholder may have been requested to get all financial information, all inventory data in regards to a homeowner's claim get me all the damaged contents to your home. It's imperative that the policyholder move as quickly as possible to get the insurance company what they requested so that any delays down the road cannot be attributed to the actual insured policyholder. You want to make sure that you can say, if you're ever in court in front of a jury, folks we've done everything they've requested of us and they simply delayed and denied my claim. If you can make that argument with all sincerity, you're in a good position. And finally, I think the one pitfall I've seen people run into and I've seen this in my cases as well is they let the insurance company dictate the game essentially. The insurance company comes in, they send their adjuster, the insurance company underwrites the risk, doesn't give a full estimation of the damages that are out there and then tries to force it down the policyholders throat. Essentially saying here's all your going to get, this is covered, this isn't covered and take it or leave it Always remember, you have the right to go consult an insurance attorney who will do a free consultation. You don't have to do what the insurance company says in this context. Now I'm not talking about when they request for information. What I'm talking about is the point they send you an estimate, when they send you the amount of what your claim is seeking to be closed for. The final check amount Rather than simply let the insurance company dictate the rules, at that point you could take it to an insurance attorney. You could have somebody come out and look at the risk. You could get an independent adjustment done and you could compare what your adjuster says versus what the insurance company adjuster says. And if the insurance company is trying to pay significantly less than what your adjuster has noted, you're in a situation of bad faith. Now they didn't delay it, they might not have denied it but them coming in riding a 60% estimate is also bad faith. That is not attempting to effectuate a fair or reasonable and prompt settlement demand. All of this is actionable under the law and is actually in the plaintiffs favor, an insured's favor, policyholder's favor in Texas. It's these things that I think people absolutely need to be aware of before they get involved with their insurance company; especially following a hurricane claim. Because I can tell you the Texas Insurance Code lays out the time line and they absolutely can not comply following a hurricane. They just can't do it. And that's why you see so many claims, so many lawsuits in fact in Harris County, Galveston County, Jefferson County, so many lawsuits again the insurance company for essentially committing bad faith.