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Making the Argument

What You Need to Know About Settling Insurance Claims

By Michelle Fulton

October 28, 2004

The information in this column is not intended as legal advice but to provide a general understanding of the law. Any readers with legal problems, including those whose questions are addressed here, should consult attorneys for advice on their particular circumstances.

Q: I had a car accident over 6 weeks ago that was the other person’s fault. I filed a claim the next day with my insurance company because the other driver wasn’t insured and was told to take my car to their claims office. I took the car, they did an estimate, and then they took the car to fix it. I heard nothing for three weeks in spite of numerous attempts to reach them by phone.

Finally, they called and asked me to sign a release to let the insurance company have the car because it was totaled, and that I needed to go clean it out. I went and cleaned out the car and signed the release. I called the claims agent and he said he’d call me the next day with a settlement amount. It’s now been two weeks and he still hasn’t called. Isn’t there a limit on how long they are supposed to wait to pay off a claim?

A: Yes, there is a limit, although it is not set in stone. An insurance company must deal with claimants in good faith. What that means is that they must work to ensure a prompt settlement of your claim. Since yours is a first-party claim (that means you filed a claim with your own insurance carrier), they should have begun their investigation and asked you for any needed information within the first 15 days from the date you filed the claim. Once you supplied the information they asked for, they should have notified you of the acceptance or rejection of your claim within the next 15 business days. If for some reason they could not accept or reject your claim, they had a duty to inform you of the reasons why. This would have given them up to an additional 45 days to accept or reject your claim.

I’m inferring that they did not follow this protocol with you since you said in your question that they did not get in touch with you and let you know what was going on. Now, if the claims adjuster told you that they would call you with a settlement amount the next day, I would consider that notification that your claim was accepted. Once they notify you that they are going to pay your claim, they are supposed to pay the claim within 5 days.

If these are the facts of your situation, then the insurance company is in violation of the Texas Insurance Code, and you very well may have a good case against them. In Texas, certain violations of the insurance code are considered tie-in statutes under the Texas Deceptive Trade Practices Act, which allow for up to treble damages when certain conditions are met.

You should consult an attorney and provide him/her with all of the facts to see if you have a viable claim.

A few words of advice: When you are dealing with an insurance company, make sure you take thorough notes. Get a notebook and write down the date and time of every call, who you spoke with, and what was said. Also, keep all written correspondence. The better records you keep, the more likely you are to make a strong case in the event that you have to resort to legal action to get your claim resolved.

Michelle Fulton is an attorney at The Fulton Law Firm, PLLC. If you have a legal problem you would like her to address, you may e-mail your request to or mail your request to her at 806 Hwy. 3, Houston, Texas 77058.

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