Getting a Fair Settlement: Disputes, Appraisal and Bad Faith

An underpayment is not the end of a claim. It is the carrier's opening position, based on the information it has. Texas gives policyholders a sequence of escalating options, and they work considerably better applied in order than all at once.

Step one: find out what the offer is actually based on

Before disputing anything, request the documents:

• The full estimate, line by line, not the summary page
• The adjuster's report and photographs
• Any engineer or specialist report relied on
• The specific policy provisions cited for any denial or limitation

You are generally entitled to the basis of the decision. Ask in writing.

Then read it properly. Underpayments usually come from one of four sources, and the fix is different for each:

Missing scope — the estimate does not include damage that exists. The most common cause by a wide margin, and the easiest to correct with documentation.

Pricing — the scope is right but the unit prices are below what contractors in your market actually charge.

Depreciation — excessive depreciation applied to the actual cash value calculation.

Coverage — the carrier says the damage is not covered. A different problem entirely, and the only one of the four that appraisal cannot solve.

Step two: the written rebuttal

This resolves more disputes than anything else, and it is not confrontational. It is specific.

A rebuttal that works includes:

• An independent scope and estimate, prepared in the same industry-standard software, so the two documents compare directly
• Photographic evidence for each disputed item
• Specialist reports where the dispute is technical — engineer for structural or causation questions, industrial hygienist for mould, leak detection for water origin
• Local contractor quotes where pricing is the issue
• The policy language supporting your position

Send it in writing, keep a copy, and ask for a written response. Carriers reopen claims routinely when presented with documentation they have to answer specifically.

Step three: appraisal

Most Texas property policies contain an appraisal clause. It is invoked when the parties disagree about the amount of loss, and it works like this:

• Each side appoints a competent, independent appraiser
• The two appraisers select an umpire
• They inspect and attempt to agree the amount
• Where two of the three agree, that determination is generally binding as to amount

Appraisal is faster and far cheaper than litigation. But note the limit: appraisal decides the amount of loss, not coverage. If the dispute is whether the damage is covered at all, appraisal is the wrong tool.

Either side can usually invoke it. Each party pays its own appraiser and shares the umpire's cost.

Step four: a complaint to the Texas Department of Insurance

TDI accepts complaints about claim handling, and the process is free. It does not adjudicate the value of your claim, but it does put a regulator's file number on the conduct — and it is effective where the problem is behaviour rather than valuation: unreturned calls, missed statutory deadlines, no written explanation for a denial.

Know the deadlines that run against your insurer

The Texas Prompt Payment of Claims Act imposes deadlines on insurers, not just policyholders. In broad terms an insurer must acknowledge a claim and begin its investigation within a set number of days, notify you of acceptance or rejection within a set period after receiving all required items, and pay within a set period after accepting.

Where those deadlines are missed, statutory interest and attorney's fees can attach. This is one of the more effective tools available to Texas policyholders, and one of the least used, because most people do not know the clock exists.

Keep a dated log of every submission and every communication. That log is what makes a Prompt Payment argument possible.

When it becomes a lawyer's job

A public adjuster handles the amount and documentation of the loss. A lawyer handles coverage litigation and bad faith.

Talk to an attorney where:

• Coverage is denied outright on grounds you believe are wrong
• There is evidence of unfair claim settlement practices
• The carrier is misrepresenting policy provisions
• Statutory deadlines have been missed and interest and fees may attach
• The claim is large enough that litigation is proportionate

Texas has deadlines for bringing an action on a claim, so this is not a decision to leave indefinitely.

The order that works

1. Get the documents and understand the basis
2. Build and submit a documented rebuttal
3. Invoke appraisal if the dispute is about amount
4. File a TDI complaint if the problem is claim handling
5. Consult an attorney if the dispute is about coverage or conduct

Skipping to step five is expensive. Stopping at step one is what carriers expect.

Where we come in

Steps one through three are our work. We review denied and underpaid claims across Texas, prepare the rebuttal documentation and represent policyholders through appraisal. There is no fee unless the claim recovers more.