When a Texas storm or flood wreaks havoc on your property, the last thing you need is an insurance company fighting or delaying your valid claim.
Unfortunately, insurance disputes are common in Texas – from Hurricane damage in Houston to hailstorm losses in Dallas, insurers often deploy a “delay, deny, and defend” strategy to minimize payouts.
As a policyholder, you have rights under Texas law to fair treatment and timely payment. This page explains those rights and the common issues (like bad faith denials, delays, and underpayments) that arise in first-party insurance claims. By understanding the process and knowing your options, you can better protect yourself – and we’re here to help you do just that. If your legitimate claim isn’t being handled properly, Attorney Omar, a Texas insurance dispute lawyer, is ready to fight for you.
Understanding Your Rights in a First-Party Insurance Dispute
Before we dive into the specific types of insurance claims, it’s important to understand what a first-party insurance dispute is all about and how Texas law affects these types of claims.
- First-Party vs. Third Party Claims: A first-party claim is one you file with your own insurance company (i.e. a homeowner’s policy claim for storm damage that occurred at your house), where a third-party claim is typically against someone else’s insurance company. This page will deal specifically with first-party claims, where your insurer has a direct contractual duty to you. If your home is damaged by a storm, your homeowner’s insurance should cover it – and if you’ve paid your premiums, you expect that coverage to be honored.
- Duty of Good Faith and Fair Dealing: Texas law specifies that insurance companies owe policyholders an implied duty of good faith and fair dealing. What this means is that the insurer must handle your claim honestly and fairly. If an insurance company unreasonably denies or delays a claim, or fails to investigate your claim properly, this is an indication that they may be acting in “bad faith,” which gives you the ultimate right to take action. (We’ll cover bad faith in detail later.)
- Texas Insurance Protections: There are many Texas-specific laws that are designed to protect consumers, such as the Texas Prompt Payment of Claims Act. For example, insurers generally must acknowledge and decide on a claim within 15 business days and pay promptly once liability is clear. Failure to do so may result in penalties. Texas Insurance Code Chapter 541 (also known as the Unfair Claim Settlement Practices) prohibits insurers from misrepresenting coverage or lowballing claims without proper justification – if they do, they can owe not just the claim amount but additional damages as well. What this means if that you have legal recourse if your insurer isn’t playing by the rules.
Common Types of First-Party Insurance Disputes in Texas
Insurance disputes can arise from a variety of disasters and circumstances. In Texas, severe weather is a major cause of first-party claims – and disputes – especially in regions like Houston and Dallas known for hurricanes, floods, and hailstorms. Below, we break down the most common types of first-party insurance claims that end up in dispute, and what challenges policyholders face with each:
Flood Damage Insurance Claims (Residential & Commercial)
Flooding in Texas neighborhoods can be devastating, as seen in the aftermath of Hurricane Harvey (2017) where entire streets and homes were submerged.
Flood damage claims present unique challenges because standard homeowners’ insurance policies in Texas typically exclude flood damage. Homeowners and businesses must have separate flood insurance (often through the National Flood Insurance Program or a private policy) to be covered.
Even with coverage, flood claims can lead to disputes. Insurers might argue that the damage was pre-existing or caused by something else, or they may drastically undervalue the cost to rebuild water-damaged property.
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Residential Flood Claims: Houston, for example, has suffered repeated flooding events, and homeowners have faced delayed or denied payouts during crises. An insurer might delay a decision while “investigating” whether water damage was due to rising flood waters (excluded under homeowners insurance) versus wind-driven rain (which might be covered). These delays are not just frustrating – they may violate Texas prompt payment rules if the insurer drags its feet without a valid reason
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Commercial Flood Claims: Businesses hit by floodwaters have to not only repair property but also deal with downtime. Insurance companies sometimes underestimate business interruption losses or enforce strict proof requirements. After a major Texas flood, a commercial policyholder might find the insurer disputing how much inventory was ruined, leading to an underpayment dispute.
What to do: Document everything after a flood (photos, inventories of damaged items, repair estimates) and report the claim promptly. If your flood claim is denied or the payout is far below your damages, it could be a bad faith situation. In fact, firms dedicated to insurance law note that big insurers often “illegally deny, delay, or underpay claims” knowing some policyholders won’t challenge them
Don’t accept a lowball offer on a valid flood claim – Attorney Omar can help review your policy and the insurer’s reason for non-payment and take action to enforce your rights. Flood claims involve technical issues (like distinguishing flood vs. wind damage and calculating total losses), so having legal guidance can make a huge difference in getting full compensation.
Storm and Wind Damage Insurance Claims (Hurricanes, Hail, Tornadoes)
Texas storms – from Gulf Coast hurricanes to North Texas hailstorms – can inflict massive property damage, as shown by this Houston home struck by a fallen tree.
Storm damage claims are among the most frequent first-party insurance disputes in Texas.
Both residential and commercial policyholders may struggle with insurers after events like hurricanes (which bring wind and rain damage), tornadoes, or hailstorms (which can devastate roofs and windows).
- Hurricane and Windstorm Claims: In coastal areas (e.g., Houston and Galveston), hurricanes and tropical storms combine wind and water damage. Insurance companies sometimes exploit this by blaming damages on an uncovered cause. For instance, after a hurricane, a homeowner might find their insurer arguing that the mold in the walls was due to “flood water” (excluded) rather than roof damage from wind (covered). Texas passed laws to curb such practices (like requiring timely notice of claims and allowing insurer involvement in repairs) yet disputes still arise. Expect insurers to heavily scrutinize hurricane claims – they may request extensive documentation and can still delay payouts during the investigation. If a significant storm claim is unjustly denied or underpaid, it could be part of a pattern of bad-faith behavior (insurers putting profits over people by minimizing disaster payouts
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Hail Damage Claims: North Texas, including Dallas-Fort Worth, sees severe hailstorms. Hail can wreck roofs, siding, and vehicles. These claims should be straightforward if you have property coverage, but underpayment is common – an insurer might only pay to patch a few shingles when in reality an entire roof needs replacement to meet pre-storm condition. Underpaying valid claims is a known bad faith practice
, and unfortunately many Texas homeowners don’t realize they can dispute the insurer’s estimate. Commercial properties (like shopping centers or warehouses) with flat roofs often battle over hail damage repairs as well, sometimes facing delays while insurers send multiple adjusters or engineers hoping to downplay the damage. -
Tornado and Wind Claims: Tornadoes can cause catastrophic losses. While less frequent than hurricanes, when they occur (especially in North Texas), insurers might invoke “Act of God” defenses or argue about whether all damage was storm-related. One common issue is insurers saying some damage was due to wear-and-tear (not covered) instead of the tornado – effectively denying parts of the claim.
What to do: After any major storm, file your claim promptly and make temporary repairs to prevent further damage (as required by most policies). Be cautious if the insurer’s initial offer seems low – you do not have to accept a quick, low settlement. Texas policyholders can invoke the appraisal process if they disagree with the amount of loss, or ultimately hire an insurance dispute attorney to press for the full payout. Remember, if an insurer unreasonably delays or refuses payment on a clear storm claim, they could face bad-faith penalties including owing you extra damages and interest
Attorney Omar can coordinate independent inspections, gather expert reports on storm damage, and hold insurers accountable so you aren’t left footing the repair bill that your insurance was meant to cover.
Denied Insurance Claims: Why Insurers Say “No” and Your Options
A claim denial is a flat refusal by the insurance company to pay anything on your claim. If you’ve received a denial letter, it likely felt like a punch in the gut – but you’re not out of options. First, understand why the claim was denied:
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Coverage Issues: Sometimes denials are based on the policy not covering the particular loss. (For example, as mentioned, flood damage under a homeowner’s policy, or an auto insurer denying a claim because the driver wasn’t listed on the policy). If the denial is valid, a lawyer can confirm that. But often the line isn’t clear – insurers might misapply an exclusion or interpret the policy in an overly narrow way to avoid paying. Insurance policies are complex, and companies may count on the fact that policyholders won’t know the difference
. An attorney can review your policy language and the denial reason to see if it was justified. -
Alleged Misrepresentation or Lapse: Insurers might deny claims by asserting the policyholder did something wrong – e.g., “you failed to disclose X on your application” or “your premium wasn’t paid (policy lapsed)”. Sometimes these reasons are legitimate; other times they are excuses manufactured to avoid payment
. For instance, a homeowner claim could be denied with an accusation that damage was from a pre-existing condition (implying the claim is fraudulent). If you believe the insurer’s reason is incorrect, that’s a red flag. One bad-faith indicator is if the insurer denied your claim without a clear or valid reason at all . -
Bad Faith Denials: As discussed, an outright denial that ignores evidence or lacks explanation can constitute bad faith. Examples: The insurer “loses” your paperwork repeatedly and then denies due to lack of documentation, or they deny coverage that is actually provided by your policy hoping you won’t challenge it
. Unjustified denial of a valid claim is breach of contract and bad faith – you can sue for the benefits plus additional damages in Texas.
What to do: Don’t take a denial at face value if it doesn’t add up. You have the right to appeal or contest a denial. Start by requesting a written explanation if not already provided (Texas law requires insurers to explain denials). Provide any additional documents the insurer claims it needs. Often, involving an insurance dispute attorney early can reverse a denial – sometimes a strong appeal letter from a lawyer pointing out the policy terms and the insurer’s obligations is enough to get the claim paid. If not, a lawsuit for breach of contract and bad faith can be filed. Remember: if your claim was wrongfully denied, not only can you recover the claim amount, but also potentially attorney fees, penalty interest, or even punitive damages for the insurer’s bad conduct
Attorney Omar can analyze your denial free of charge and advise you on the next steps to get the insurance coverage you paid for.
Delayed Insurance Claims: When the Insurer Drags Its Feet
Not all disputes involve a outright “no” from the insurer. Sometimes the issue is that months are passing with no resolution – this is the classic delay scenario. In Texas, after a major disaster, it’s unfortunately common for claims to pile up and insurers to become slow or unresponsive. However, unreasonable delay is not acceptable. As noted, Texas law gives insurers about 15 business days to acknowledge and decide on a claim in most cases
Signs of problematic delays include: the adjuster not returning calls or emails
What to do: Hold the insurer accountable to timelines. You can send a firm but polite written inquiry referencing your claim number and the date filed, asking for a status and citing that it’s beyond a reasonable timeframe. Sometimes just showing you know your rights prompts action. If that doesn’t work, involve a lawyer. Insurance companies often count on delays to pressure you, but when an attorney steps in, it signals that you won’t be pushed around
Attorney Omar can send a Texas Insurance Code Chapter 542 demand letter that starts the clock on statutory penalties. Ultimately, if an insurer unreasonably delays paying a valid claim, a lawsuit can force their hand and make them pay extra for the delay. The key is not to let endless delays silently continue – you have options to break the logjam and get a resolution.
Underpayment and Lowball Settlements: When Insurers Don’t Pay Enough
Sometimes you get a check from the insurance company, but it’s far less than what you need to cover the damage. This is an underpayment dispute (or partial denial). It can be very frustrating because it feels like the insurer is acknowledging the claim, but not fully. Underpaying valid claims is a common tactic – as one law firm notes, insurers know they can often “get away with it when a policyholder is not aware of their rights”
Common scenarios:
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The insurance company’s estimate omits some damage or uses unreasonably low unit prices for labor and materials. For example, after a hailstorm, they might agree to replace a few shingles and do a patch job, whereas a reputable contractor insists the entire roof is totaled. The insurer might be trying to save money by piecemeal fixes that don’t truly restore your property.
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Depreciation disputes: Insurers often depreciate the value of damaged items (which is allowed in actual cash value policies), but sometimes they over-depreciate to cut the payment. If you have replacement cost coverage, they should pay the difference once you incur the cost to replace, but some insurers make that second payment difficult to obtain.
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Deductible misapplication: Occasionally, underpayment might simply be an error in how the deductible was accounted for, or overlapping deductibles if multiple events occurred. It’s worth verifying the math – but if everything is in order and the amount is still too low, you likely have a dispute.
What to do: Do not accept a check as full and final if you believe it’s insufficient. In many cases, you can invoke the appraisal clause in your insurance policy – this is an alternative dispute resolution where you and the insurer each hire an appraiser to assess the loss and, if they disagree, an umpire decides. This can resolve some underpayment issues without court, though you’d want guidance because the process can be tricky. If the underpayment is due to clear bad faith (insurer intentionally lowballed or ignored evidence), you can pursue a legal claim for the difference and any consequential damages. Keep all contractor estimates, receipts, and expert reports that show the true cost of repair; these will be crucial evidence. Remember, Texas law treats unjustified underpayment the same as a denial – it’s a breach of the insurer’s duty
You are entitled to the coverage you purchased. Attorney Omar can negotiate with the insurer to revise the settlement (often the threat of bad-faith litigation prompts a fair offer) or take the case to court if needed. By standing firm, you increase the chance of recovering every dollar owed under your policy.
Bad Faith Insurance Claims and Texas Law
Throughout the above sections, we’ve mentioned “bad faith” multiple times. Here, we tie it together. A bad faith insurance claim is essentially a lawsuit you, the policyholder, bring against an insurance company for its wrongful conduct in handling your claim. In Texas, in addition to breach of contract, you can sue for bad faith when the insurer’s conduct is more than just a close call on coverage – it’s unreasonable or malicious. Here are common examples of bad faith by insurers (many of which we’ve touched on):
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Denying a Claim with No Reason or False Reason: If an insurer denies your claim without a valid explanation or based on false pretenses, that’s bad faith. (E.g., saying “no record of your policy” or “you didn’t pay your premium” when you actually did
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Excessive Delay or Lack of Communication: Failing to acknowledge and act promptly upon communications about a claim is prohibited
. Ignoring an insured’s calls or dragging out an investigation without cause can be bad faith, as it violates the duty to timely handle claims. -
Inadequate Investigation: If the insurer doesn’t properly investigate the claim – for instance, not sending an adjuster out, or ignoring evidence you provided – and then denies or lowballs the claim, that is bad faith
. Texas law expects insurers to conduct reasonable investigations before making decisions. -
Misrepresentation of Policy or Facts: An insurer knowingly misinforming you about what your policy covers, or lying about facts (like claiming you submitted incomplete forms when you did not), is acting in bad faith
. For example, telling a homeowner their policy doesn’t cover wind damage when it clearly does would fall in this category. -
“Lowball” Offers and Underpayment: Offering far less than a claim is worth, without a reasonable basis, can be considered bad faith (especially if the insurer refuses to adjust even after you present evidence of higher costs). It shows the insurer isn’t dealing fairly or attempting to indemnify you as promised.
In Texas, bad faith is serious. If you prove an insurer acted in bad faith, you can recover damages beyond just the contract amount. This may include: the money you had to spend out of pocket due to their denial/delay, mental anguish in certain cases, statutory penalty interest (often 18% per annum on the claim amount for delayed payment) and attorney’s fees
Proving bad faith requires showing the insurer had no reasonable basis for its action and knew (or should have known) it was acting unreasonably. That’s where having a skilled attorney is crucial – we know the red flags and how to gather the evidence. For instance, internal emails obtained in litigation might show the insurer’s management instructed adjusters to deny all claims over a certain value (a smoking gun for bad faith). Or perhaps the insurer ignored a report from its own expert that said to pay the claim – another clear indicator of unreasonable behavior.
Bottom line: Insurance companies have teams of lawyers and adjusters to protect their interests; when they cross the line into bad faith, you have the right to hold them accountable. Attorney Omar has experience with bad faith insurance cases and understands the nuances of Texas insurance law. Our team can help you recognize bad faith, file a bad faith claim, and seek all compensation available under the law so that the insurer faces consequences for its actions
How an Insurance Dispute Attorney Can Help
Leveling the Playing Field: Insurance companies handle claims every day and have adjusters, engineers, and lawyers working to protect their bottom line. When you go up against them alone, it’s easy to feel overwhelmed. An experienced insurance dispute attorney becomes your advocate and equalizer. For example, we know the tactics insurers use to delay or deny – from unnecessary paperwork requests to misinterpreting policy language – and we can counter them effectively
Expert Policy Interpretation: Insurance policies are dense documents filled with jargon and exclusions. A key part of resolving a dispute is understanding the fine print. Attorney Omar will review your policy in detail to identify all coverages you’re entitled to. Often, we find coverages that clients didn’t realize could apply. For instance, if your home was unlivable after a storm, you might have additional living expense coverage that should pay for a hotel – even if the insurer never mentioned it. By knowing the policy inside-out, we make sure the insurance company honors every provision and we challenge any improper interpretation. As one competitor noted, lawyers can anticipate the arguments insurers will make and craft a strategy to overcome them
Gathering Evidence & Building Your Case: Whether it’s a negotiation or a lawsuit, you need evidence to back up your claim. We help compile repair estimates, expert evaluations, weather reports, medical records – whatever is needed for your specific claim. If your claim was denied for lack of proof, we’ll dig in and find the proof. If the insurer says the damage isn’t as extensive as you claim, we can bring in independent adjusters or engineers to inspect and testify. Our firm has a network of trusted professionals (contractors, public adjusters, engineers, etc.) from prior cases involving flood and storm damage. This thorough case building puts pressure on the insurer to do the right thing.
Negotiation and Litigation Muscle: Once we’re involved, we handle all communications with the insurance company. You no longer have to endure unanswered calls or confusing responses – we’ll keep you updated. We present the insurance company with a strong, well-supported demand for what you are owed. Often, insurance companies choose to settle at this stage rather than fighting a battle they can’t win. If they still won’t budge, we are fully prepared to file a lawsuit and take the fight to court. Attorney Omar has litigated insurance disputes and is not afraid to go to trial if that’s what it takes. Insurers know which lawyers actually fight and which just talk – showing you have a determined attorney who will go the distance can itself prompt a fair settlement.
No Upfront Cost to You: Clients are often worried about the cost of hiring an attorney, especially when a disaster has already put them in financial stress. Our firm works on a contingency fee basis for insurance dispute cases, which means you pay nothing upfront and absolutely no fee unless we win recovery for you
Personalized and Prompt Action: We know every claim and client is unique. When you contact Attorney Omar, you won’t be lost in a big-firm shuffle. You get personal attention and a legal team that treats you like a person, not a file number. Our goal is not just to win your case, but to alleviate your stress. We’ll guide you through what can be a confusing process, answer your questions, and give you peace of mind that someone is fighting for your rights. While you focus on getting your home or business back together, we focus on the insurance battle.
In summary, having a lawyer changes the dynamic. Insurers have lawyers – you should have one too, to make it a fair fight. As one Dallas firm aptly put it, leaving you to handle an aggressive insurance company alone puts your financial stability at risk
Talk to Attorney Omar About Your Insurance Dispute
If you’re tired of fighting the insurance company alone, or unsure what to do after a claim denial, reach out to Attorney Omar for a free, no-obligation consultation. As a Texas insurance dispute attorney with experience in flood, storm, and bad faith claims, Attorney Omar can evaluate your case, explain your rights and options, and help you pursue the money you are owed under your policy. Time is critical in insurance cases – delays can hurt your claim and there are legal deadlines to consider – so don’t wait until the insurer’s tactics wear you down
Contact us today by phone or through our online form. Let us handle the insurance company while you focus on rebuilding and recovery.
You paid for insurance coverage to protect you in times of need. Now it’s time to make the insurer keep their promise. Attorney Omar is ready to fight for you and hold them to the terms of your policy and the law.