Property Insurance Claim Denial Guide – Frisco, Texas

Comprehensive Guide to Property Insurance Claim Denial in Frisco, Texas

Introduction: Why This Matters to Frisco Homeowners

Frisco, Texas is no stranger to severe weather. Situated in tornado alley and less than 40 miles north of Dallas, the city regularly experiences hailstorms, straight-line winds, and spring thunderstorms that can leave roofs shredded and interiors waterlogged. According to the Texas Department of Insurance (TDI), Collin and Denton Counties—both of which include parts of Frisco—file thousands of wind and hail claims every year. Yet many residents receive partial payments or outright denials, forcing them to shoulder costly repairs alone. This guide explains, in plain language, how Texas law protects policyholders and what specific steps Frisco homeowners can take after a property insurance claim denial.

1. Understanding Your Rights in Texas

1.1 The Insurance Contract

Your homeowner’s policy is a binding contract. In exchange for premiums, the carrier agrees to pay covered losses. Texas law enforces this promise through:

• Texas Insurance Code Chapter 542 (Prompt Payment of Claims Act) — imposes strict timelines for acknowledging, investigating, and paying claims.

• Texas Insurance Code Chapter 541 — prohibits unfair settlement practices, including misrepresenting policy terms or undervaluing damages.

1.2 Good-Faith and Fair-Dealing Obligation

The Texas Supreme Court recognizes a common-law duty of good faith and fair dealing for insurers (see Arnold v. National County Mutual Fire Ins. Co., 725 S.W.2d 165 (Tex. 1987)). If an insurer unreasonably delays or denies a claim when liability is reasonably clear, the homeowner may recover actual damages plus extra-contractual damages.

1.3 Statutes of Limitation

• Breach of Insurance Contract: 4 years under Tex. Civ. Prac. & Rem. Code §16.004, unless the policy shortens the period (many policies limit it to 2 years + 1 day).

• Bad-Faith & Chapter 541 Claims: 2 years from the date the unfair act occurred or was discovered (Tex. Ins. Code §541.162).

• Prompt-Payment Penalties (Chap. 542): Must be brought within 2 years of the violation.

2. Common Reasons Property Insurance Companies Deny Claims in Texas

2.1 Excluded Perils

Policies often exclude flooding, earth movement, and wear-and-tear. Frisco homeowners near Panther Creek or the Lake Lewisville tributaries should confirm whether separate flood insurance is needed.

2.2 Late Notice or Failure to Mitigate

Carriers may allege the homeowner waited too long to report hail damage or failed to tarp a roof, causing additional interior water damage. Under Chapter 542.051(4), they still must show actual prejudice from the delay to deny a claim.

2.3 Alleged Pre-Existing or Cosmetic Damage

Insurers frequently label hail strikes on metal roofs or gutters as “cosmetic.” Under Texas law, a cosmetic exclusion must be clearly written into the policy, and the burden is on the insurer to prove it applies.

2.4 Improper Valuation or Depreciation

Texas policies may use Actual Cash Value (ACV) rather than Replacement Cost Value (RCV). Disputes often arise over age-based depreciation tables. TDI Bulletin B-0042-21 reminds carriers that depreciation must be item-specific and reasonable—blanket percentage reductions violate Chapter 541.

3. Texas Legal Protections & Regulations

3.1 Texas Insurance Code Chapter 542 — Deadlines That Matter

• 15 days to acknowledge receipt of your written claim and request any additional information.

• 15 business days after receiving all requested info to accept or deny the claim.

• 5 business days to pay after agreeing to settle.

If the carrier misses these deadlines, it may owe 18% annual interest on the amount due plus attorney’s fees (Tex. Ins. Code §542.060).

3.2 Chapter 541 — Unfair Settlement Practices

Prohibited acts include:

• Misrepresenting material facts or policy provisions.

• Failing to attempt a prompt, fair, and equitable settlement.

• Refusing to pay without conducting a reasonable investigation (see 28 TAC §21.203).

3.3 Texas Administrative Code Title 28

Rules from the Texas Commissioner of Insurance govern adjuster licensing, photographic documentation standards, and claims communications. Violations can support an administrative complaint.

3.4 Recent Court Guidance

The Texas Supreme Court’s decision in Barbara Technologies Corp. v. State Farm Lloyds, 589 S.W.3d 806 (Tex. 2019) confirms that payment of an appraisal award does not bar a Chapter 542 prompt-payment claim.

4. Steps to Take After a Denial in Texas

Step 1: Read the Denial Letter

Texas Insurance Code §542.056(c) requires the insurer to state the “specific reasons” for denial. Compare those reasons with policy language.

Step 2: Gather Evidence

• Photographs from the date of loss and immediate aftermath.

• Weather reports (National Weather Service hail maps for Frisco zip codes 75033, 75034, 75035).

• Contractor or engineer inspections. Make sure contractors are registered with the City of Frisco Building Inspections Division.

Step 3: Request the Claim File

Under Texas Administrative Code §5.9303 and Chapter 541, you are entitled to certain claim documents. Send a written request—by certified mail—to the adjuster and the carrier’s corporate headquarters.

Step 4: File a Written Appeal or Supplemental Claim

Many carriers offer internal appeals. Supply additional documentation, line-item estimates, and expert reports. Reference Chapter 542 deadlines in your letter.

Step 5: Consider Appraisal

Most Texas policies include an appraisal clause allowing each party to select an appraiser; the two appraisers select an umpire. The process resolves amount of loss disputes but not coverage determinations.

Step 6: Lodge a Complaint with the Texas Department of Insurance

You can file online, fax, or mail. TDI’s Consumer Protection Division may contact the insurer for a written response, often prompting re-evaluation.

Texas Department of Insurance Complaint Portal

Step 7: Consult a Licensed Texas Attorney

If the claim remains unresolved, legal counsel can evaluate breach-of-contract, bad-faith, and prompt-payment causes of action. Texas attorneys must be licensed by the State Bar of Texas and should maintain malpractice insurance.

5. When to Seek Legal Help in Texas

5.1 Red Flags

• Carrier refuses to provide a full copy of the policy.

• Adjuster changes multiple times mid-claim.

• Delay tactics approaching the 2-year statute for bad-faith claims.

• Lowball offers significantly below contractor estimates.

5.2 Attorney Fees & Statutory Penalties

Chapter 542.060 allows recovery of reasonable attorney’s fees and up to 18% interest on the amount wrongfully withheld. Chapter 541 permits treble damages if the insurer acted knowingly.

5.3 Mediation & Litigation Venues

For Frisco residents, suits are typically filed in Collin County or Denton County district courts, depending on property location. Claims exceeding $75,000 and involving out-of-state insurers may be removed to the U.S. District Court for the Eastern District of Texas (Plano Division).

6. Local Resources & Next Steps

6.1 City of Frisco Building Inspections Division

Before starting repairs, verify contractor permits. Unpermitted work can violate policy conditions.

6.2 North Texas Better Business Bureau

Check complaints against roofing or restoration companies.

6.3 Frisco Office of Emergency Management

Maintains historical weather data useful when proving storm events.

6.4 TDI and External Links

Full Text – Texas Insurance Code Chapter 542 Texas Department of Insurance Consumer Help Page Barbara Technologies Supreme Court Opinion

Legal Disclaimer

This article is for informational purposes only and does not constitute legal advice. Laws and regulations change. Consult a licensed Texas attorney regarding your specific situation.

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