Dealing with a hurricane can be incredibly stressful for those affected. After assessing the property damage, business owners should be quick to file a claim with their insurance company. After a claim has been filed, how long is it until a policyholder knows whether or not it has been accepted?
How Long an Insurance Claim Takes Once Filed
It’s only normal to want to get back on track after a hurricane has turned day-to-day business activities upside-down. Taking the time to thoroughly document the damage and file an insurance claim seems straightforward enough, but the claims process can be fairly complex. Not only that, but large loss claims can often take much longer to process, and require more back and forth with your carrier than smaller claims.
The length of time a property damage claim takes to resolve often depends on factors including which insurance company you have as well as the type and extent of the damage. Typically, claimants have to wait two to three days before getting a response from an insurance provider after filing a claim for property loss. However, because hurricanes are large, wide-spanning natural disasters, the average wait time for a response is likely to be much longer due to the high volume of claims—sometimes taking two weeks or longer.
Some states have specific requirements and timeframes after receiving written notice of a claim. In Texas, the Texas Prompt Payment of Claims Act (TPPCA) requires an insurer to (1) acknowledge receipt of the claim; (2) begin an investigation of the claim; and (3) request from the policyholder all documentation necessary to secure final proof of loss. If the insurer’s acknowledgment is not done in writing, the insurer must make an internal record of the date and content of the acknowledgment. An insurer licensed in Texas has 15 days to do this, while an eligible surplus lines insurer has 30 business days. As part of an investigation of the claim, an insurer may send an adjuster to come and inspect the property for damage. This visit and assessment occur anywhere from three days to a week after the policyholder’s initial contact with the insurer.
Once the insurance company and the insurer have received all necessary information required to investigate the claim, including the adjuster’s, the insurance company has an additional 15-day period to notify the policyholder whether the claim has been accepted or denied. In the event the claim is denied, the insurer must provide valid reasoning for the denial. On the other hand, if the carrier is unable to accept or reject the claim within 15 days, it must notify the claimant and provide reasoning for needing more time. The insurer can be granted 45 more days to meet this initial deadline. If the claim is accepted, it must be paid within five business days. In Texas, the insurance company is required to pay the claim within 60 days after receiving the requested items from the policyholder. If the claim has not been paid within the 60-day timeframe, the insured is entitled to not only the payment of the claim but also statutory damages of up to 18 percent interest per year and attorneys’ fees.
According to the National Association of Insurance Commissioners (NAIC), the top policyholder complaint about the claims process is insurance companies delaying a claim payment.
What Policyholders Need to Know Before Filing a Hurricane Insurance Claim
Despite the claims process being lengthy and frustrating, policyholders must know what can be covered under windstorm and flood insurance policies before a hurricane makes landfall.
Windstorm insurance will cover direct damage to commercial property caused by wind and hail. A windstorm policy may also provide some form of business interruption coverage in the event the property is unusable for some time due to the wind or hail damage caused by a hurricane.
While windstorm coverage does provide some relief from hurricane damage, floods caused by a hurricane require an additional flood policy to be purchased. Flood insurance will cover damage due to an unforeseen flood event. Meaning water filling your apartment due to a burst pipe or toilet overflow will likely be covered. More importantly, flood insurance often does not provide business interruption coverage like some windstorm policies.
To ensure your commercial property insurance coverage is adequate to cover potential hurricane damage – especially in Texas – policyholders should consult with experienced legal counsel.
Hurricane Insurance Coverage Attorneys
Grappling with an insurance company while also trying to get back to business can be a difficult process to go through. Despite there being clear laws in Texas governing the timing of the acceptance or denial of an insurance claim, some insurance companies ignore these regulations in the hopes of financial gain.
At Raizner Law, our insurance coverage attorneys understand the many ways insurance companies try to undermine the claims process by delaying, underpaying, or denying claims. If you are dealing with a property insurance claim that has been wrongfully denied, delayed, or underpaid, contact our office to see how we can help.