TEXAS WINDSTORM INSURANCE ASSOCIATION (TWIA) CLAIM DISPUTES

Good morning folks, if you have an insurance policy with TWIA, right about now or in the near future you will be getting a letter with one of the two following headings or a variation of the two combined:

  1. “Notice of Claim Acceptance”
  2. “Notice of Claim Denial”

These two letters are dramatically different in nature but they will both go on to explain when your claim was received, the claim issues you noted and note specifically other observed damages. The letter likely includes  documents which detail what to do if and when you make repairs, legal notices, what to do if you disagree with the payment amount, frequently asked questions about appraisal and an appraisal request form.  On the page titled “If you disagree with the payment amount”, there will be a bold underlined phrase stating: “All disputes concerning the payment amount for an accepted claim under your insurance policy must be resolved through the appraisal process”.   A little further down you will likely see a statement that says: “Please be aware that if you do not request appraisal within the time period above, you waive your right to contest TWIA’s determination of the payment amount.”

History behind the changes: What I am about to share with you will have you fighting mad and it should.  A couple years ago the Texas legislature passed a bill providing a massive number of protections and special conditions for TWIA.  So that you will fully understand the gravity of the protections that were given to the insurers I will explain.   Once you receive the letter above from TWIA, you only have 60 days from the date of that letter to demand appraisal.  If you disagree, as an insured, you are now forced to use the appraisal process and you are forced to pay for it out of pocket.  In a nutshell, appraisal is a process that is used to resolve disputes related to claims’ amounts, whereby you hire an appraiser, the insurer hires an appraiser and the two appraisers either agree on a third party umpire who decides the differences or have an umpire appointed by a local court if the two appraisers can’t agree on the umpire.  Appraisal is normally a very good option for resolving disputed claims, however, it is limited under TWIA policies.   Appraisal in most standard policies provides that both parties have the right to petition the court for an umpire appointment if the two appraisers cannot agree on an umpire.  However, if you have a TWIA policy, end up in appraisal and the two appraisers have to get an umpire assigned, the umpire is picked by the Texas Department of Insurance from an “approved umpire list”.  Here is the bad news about the “approved umpire list”.  If you work under the direction of insurers day in and day out you can be included on the list.  However, no one who is working for an insured as a public adjuster at the time of TWIA approved umpire list renewal is approved. The bottom line is that the TDI approved umpire list is apparently full of folks who represent insurer’s every day, but anyone who may happen to represent an insured at the time of their license renewal is refused admission to the list.

The 60 days: You only have 60 days from the date of the letter above to take action.  If you demand appraisal, you are forced into an appraisal process that you have to pay for out of pocket that limits your rights and recovery.  If you don’t demand appraisal, or you simply miss paying attention to the 60 day time limit, you are done and your claim is finished.  According to TWIA, failure to meet this 60 day time frame will result in you losing all rights to contest your claim.   I have an actual client who received his letter, was unhappy, hired us, we notified the insurer and they dispatched an engineer who may not have a report for weeks.  Potentially, as this stands, TWIA can acknowledge your claim in a delayed fashion, your adjuster can state the he is three weeks behind before showing up (as ours did), the insurer can dispatch an engineer to re-evaluate your claim once you question it, they can correspond at their own speed thereby delaying your claim, 60 days can pass and you are out of luck.  Wow – I could not make this up if I tried!  Perhaps you should start calling your senator and state representative and urge them to extend the response periods under the TWIA policy in light of this declared catastrophe.  If not, this could become the second catastrophe from Harvey.  For more information on these claims issues visit our website at: www.publicinsuranceadjuster.net.  As always if you have questions about your rights or the time periods in YOUR specific claim, seek the advice of legal counsel. Make sure to watch for a Texas Department of Insurance bulletin regarding an extension of these time periods.