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The Insurance Adjuster's Guide for Handling Texas Claims - 2016

© 2016 Mark Courtois

Laws regulating the handling of claims can  sometimes be confusing.  Add to that the fact that many adjusters handle claims in multiple states, and the task of keeping the laws straight can be daunting. Education is simply the best way for adjusters and carriers to avoid extra-contractual liability.  The Insurance Adjuster's Essential Guide for Handling Texas Claims was written as a service to insurance carriers and claims adjusters. This publication also forms the basis of the written materials for seminars we provide adjusters giving continuing education credit in the area of ethics and consumer protection.  The basic adjuster seminar has been approved by the Texas Department of Insurance for two hours of continuing education credit for all adjuster types and satisfies the two hour ethics requirement for adjusters.  An additional  seminar can be added for one additional hour, providing a more in-depth look at the Deceptive Trade Practice Act.  Copies of this Guide can be obtained on


The 2016 Guide

1.   Introduction

2.   Who are Texas Insurance Adjusters?

3.   Sources of Ethical Standards

        A.    Insurance Adjuster

        B.    Public Adjusters

4.   The Insurance Policy

        A.   The Consumer Bill of Rights

        B.   Duties Set out in the Insurance Contract

5.   Common Law Conflict of Interest
        A.   Uninsured Motorist claims and the Hunt Presumption

        B.   Subrogation

6.   Privacy Issues

        A.   Non-Public Personal Financial Information

        B.   Non-Public Personal Health Information

7.    Prohibited Conduct under the Texas Insurance Code

        A.   Prohibited Misrepresentations Regarding Policy or Insurer

        B.   Prohibited Misrepresentations Regarding an Insurance Policy

        C.   Prohibited Settlement Practices

8.    Extra-Contractual Claims Against the Insurer

        A.   Something More than Breach of Contract Required

        B.   Other Decisions

9.    Breach of the Duty of Good Faith and Fair Dealing

        A.   When Bad Faith Not Shown

        B.    Extreme Conduct

        C.   Failure to Investigate

        D.   Use of Experts as Basis for Denial

        E.   Not Available in Worker's Compensation Claims

        F.   Good Faith Duty to Insured for Third-Party Liability Claims

10.  Prescribed Conduct under the Texas Insurance Code

        A.   Records of Complaints

        B.   Providing Claim Information on Request

        C.   Provide Written Notice of Offer or Settlement on Casualty Policy Claims

        D.   Action to Recover Deductible Under Certain Auto Insurance

        E.   Special Notice Requirements for Claimants regarding Motor Vehicle Repairs

        F.   Payee Notification of Settlement Payment

11.  Prompt Payment of First Party Claims

        A.   Importance of Compliance

        B.   Elements required to mak a claim under the Act

        C.   What Claims are Covered

        D.   Initial Response to Receipt of Claim

        E.   Deadline for Acceptance or Rejection of Claim

        F.   Payment of Claim

        G.   Penalties for Violation of the Act

        H.   Recommendations about Complying with the Act

        I.    Appraisal Provisions

12.  Insurance Policy Construction and Defenses

        A.   Texas Rules of Policy Interpretation

        B.   Coverage Trigger - Texas Applies Actual Injury Rule

        C.   Policy Defense and Exclusions

13.  Handling Third-Party Claims

        A.   The Insurer's Duties for Third-Party Claims - Defend & Indmenify

        B.   Responding to the Insured's Tender of Defense

        C.   Reservation of Rights

        D.   The Carrier's Right to Control the Defense

        E.   Should a Declaratory Judgment Action be Commenced on Coverage

        F.   Wrongful Denial of Coverage

        G.   Assignments Against Insurers

        H.   Equitable "Virtual-Representation" Doctrine

        I.   Settlement Issues

        J.    Attorney Billing Guidelines and Attorney Ethical Issues

14.  Demands for Policy Limits

        A.   The Stowers Duty

        B.   When is the Stowers Duty Triggered?

        C.   Determining Policy Limits

        D.   Reasonable Settlement

        E.   Excess Insurance and Self-Insured Retention

        F.   Recommendations

15.  The Texas Deceptive Trade Practices Act

        A.   Introduction

        B.   Intent to Deceive Irrelevant to DTPA Liability

        C.   Who is a Consumer

        D.   Who is a Proper DTPA Defendant

        E.   Prohibited Trade Practices Actionable Under the DTPA

        F.   The Laundry List of Prohibited Conduct

        G.   Compared to Breach of Contract Claims

        H.   Damages

        I.    Claims Excluded from the DTPA

        J.    Other Issues

16.  Procedural Issues for DTPA and Insurance Code Claims

        A.   Notice Requirements

        B.   Offers of Settlement

        C.   Mediation

        D.   Recommendations

17.  Conclusion



A.   Consumer Bill of Rights for Personal Automobile Insurance

B.   Sample Texas endorsement from a Texas CGL policy

C.   Map of Texas Counties

D.   Map of Texas Metropolitan Statistical Areas, 2003  

E.   Texas Prompt Payment of First Party Claim Worksheet

F.   The Texas "Stowers" Liability Worksheet

G.  Notice & Response Worksheet for Demands Pursuant to DTPA and Insurance Code

H.  Texas Unfair Claim Settlement Practices

I.    Statutory Notice required for Motor Vehicle Repairs

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