Property Insurance Claim Denial Guide – Richardson, Texas

Introduction: Why Richardson, Texas Homeowners Need This Guide

Severe spring hailstorms roll across the North Dallas–Richardson corridor almost every year, shattering skylights, denting roofs, and flooding attics. According to the Texas Department of Insurance (TDI), hail was the leading cause of insured loss in Dallas County in 2022. Yet many Richardson residents discover that their insurer either partially pays or flat-out denies their property insurance claims. Whether you live in Canyon Creek, Breckinridge Park, or the Telecom Corridor, a denied claim can jeopardize your home’s value and your family’s safety.

This comprehensive guide—grounded exclusively in Texas statutes, TDI regulations, and published Texas court opinions—explains how to respond strategically when you receive a claim denial. While we slightly favor the policyholder’s perspective, every fact and citation is drawn from authoritative sources so you can make informed decisions.

Understanding Your Rights in Texas

1. The Texas Insurance Code Gives You Core Protections

Two chapters of the Texas Insurance Code are especially powerful for homeowners:

• Chapter 542 – Also known as the “Prompt Payment of Claims Act,” it requires insurers to acknowledge, investigate, and pay claims within strict timelines. (Tex. Ins. Code §§ 542.055–542.060)

• Chapter 541 – Prohibits unfair or deceptive acts by insurers, including misrepresenting policy provisions or failing to settle claims in good faith. (Tex. Ins. Code §§ 541.060(a)(2)(A) & 541.151)

If your carrier violates either chapter, you may recover actual damages, 18% per-year statutory interest on the claim amount, and reasonable attorney’s fees.

2. The Texas Administrative Code Regulates Claim Handling

Title 28, Part 1, Chapter 5, Subchapter L sets building-code upgrade requirements for residential policies. Richardson homes built before 2000 often need code upgrades after storm damage. If your policy includes “ordinance or law” coverage, the insurer cannot ignore these costs. (28 Tex. Admin. Code §5.4008)

3. Statute of Limitations to Sue Your Insurer

Under Texas Civil Practice & Remedies Code §16.070(b), an insurance policy can contractually shorten the statutory two-year limitations period only to a minimum of two years and one day from the date the cause of action accrues. Review your policy and calendar any deadline immediately.

Common Reasons Property Insurance Companies Deny Claims in Texas

1. Alleged Pre-Existing Damage

Insurers frequently blame roof leaks on “wear and tear” rather than the April hailstorm that triggered your call. Texas courts have held that carriers must segregate covered and uncovered damage. Lennar Corp. v. Markel Am. Ins. Co., 413 S.W.3d 750 (Tex. 2013).

2. Late Notice of Claim

Most policies require “prompt” notice. However, Chapter 542 only shortens payment deadlines; it does not nullify coverage for slightly late notice unless the insurer shows prejudice. See PAJ, Inc. v. Hanover Ins. Co., 243 S.W.3d 630 (Tex. 2008).

3. Excluded Perils or Policy Limitations

Common exclusions include flooding, earth movement, and faulty workmanship. Yet endorsements or separate flood policies may restore coverage. Always request the insurer’s complete certified policy record.

4. Alleged Fraud or Misrepresentation

Material misstatements can void coverage. Still, the carrier must prove the misrepresentation was intentional and relied upon. (Tex. Ins. Code §705.004)

5. Failure to Mitigate Further Damage

You must protect the property from ongoing harm—typically by tarping roofs or shutting off water. Keep invoices to document mitigation expenses; they are usually reimbursable.

Texas Legal Protections & Regulations

1. Prompt Payment Deadlines

• 15 days – Acknowledge the claim and request information. (§542.055)

• 15 business days after receiving documents – Accept or reject the claim. (§542.056)

• 5 business days after acceptance – Pay the claim. (§542.057)

Missed deadlines trigger the 18% annual interest penalty plus attorney’s fees.

2. Appraisal Clause Procedure

Most Texas policies contain an “appraisal” provision allowing each side to pick an appraiser and an umpire to decide the loss amount. In State Farm Lloyds v. Johnson, 290 S.W.3d 886 (Tex. 2009), the Texas Supreme Court confirmed that appraisal determines amount of loss, not causation. If the insurer later refuses to pay the appraisal award, you may sue under Chapter 542.

3. Bad-Faith Claims Handling

Under Tex. Ins. Code §541.060 and the common-law rule in Arnold v. Nat’l Cnty. Mut., 725 S.W.2d 165 (Tex. 1987), you may recover extra-contractual damages if the insurer acts with “no reasonable basis” and knew or should have known its denial was improper.

4. Deceptive Trade Practices (DTPA)

Texas Business & Commerce Code §17.50 allows treble damages when insurers engage in deceptive practices. Homeowners must show reliance and producing cause, but courts regularly allow parallel DTPA and Insurance Code claims.

Steps to Take After a Denial in Texas

1. Scrutinize the Denial Letter

Texas Administrative Code requires carriers to give a “full explanation of the denial, referencing policy language.” Confirm that the letter cites relevant provisions and facts.

2. Request the Claim File

Under Tex. Ins. Code §542.004, you may demand all adjuster notes, photographs, and third-party reports. Send a certified letter referencing the statute and give the insurer 15 days.

3. Secure Independent Experts

Hire a licensed Texas public adjuster (regulated under Tex. Ins. Code Chapter 4102) or a credentialed engineer to inspect damage. Richardson’s building-code enforcement office can supply local wind uplift and hail impact standards that independent experts must follow.

4. Consider the Appraisal Clause

Send written demand for appraisal if the dispute is solely about the dollar amount, not policy coverage.

5. File a Complaint with TDI

TDI investigates misrepresentations and delay tactics. You can file online, by mail, or via fax. Include your policy, denial letter, and any photographs. TDI often requires a written insurer response within 15 days. Visit TDI’s complaint portal.

6. Preserve All Evidence

• Photographs of damage before repairs

• Receipts for temporary fixes

• Emails, texts, and call logs with the insurer

• Drone footage (if safe and compliant with FAA rules)

When to Seek Legal Help in Texas

1. The Claim Involves Significant Structural Damage

Full roof replacement in Richardson averages $18,000–$30,000. Denials of such magnitude justify an attorney.

2. Evidence of Unfair Settlement Practices

If the carrier repeatedly switches adjusters or requests redundant documentation, this may indicate stalling—an actionable violation of §542.003.

3. Approaching the Statute of Limitations

Consult counsel at least six months before any contractual deadline to file suit. Attorneys licensed by the State Bar of Texas must meet stringent continuing-education standards in insurance law.

Local Resources & Next Steps for Richardson Homeowners

1. City of Richardson Building Inspection Department

Obtain post-storm inspection reports and permit history to counter insurer claims of pre-existing damage.

2. National Weather Service – Dallas/Fort Worth Station

Archived hail and wind data can corroborate the date and severity of storms. Use certified weather reports as evidence.

3. Texas Windstorm and Hail Association (TWIA) – Gulf Coast Only

Typically not applicable to Richardson but relevant if you own coastal property.

4. Public Adjuster Registry

Verify adjuster licenses at TDI License Lookup.

5. Mediation and ADR

TDI offers a Consumer Mediation Program for certain disputes under $50,000. Although nonbinding, mediation can prompt settlement.

Authoritative External References

Texas Insurance Code Chapter 542 Texas Insurance Code Chapter 541 PAJ, Inc. v. Hanover Insurance Co. Texas Department of Insurance (TDI)

Legal Disclaimer

This guide provides general information for Richardson, Texas homeowners. It is not legal advice. Laws change, and your facts matter. Always consult a licensed Texas attorney before taking legal action.

If your property insurance claim was denied, call Louis Law Group at 833-657-4812 for a free case evaluation and policy review.