Texas Adjuster Training LLC, believes and teaches that fair and honest (good faith) conduct is one of the most important qualities to being a successful insurance adjuster. All the information assembled in this course is intended to assist the adjuster in correctly identifying and appraising damages.
We will address Policy Coverage in general and do not make any specific suggestions or guidelines for acting in Good Faith, as we are training for numerous jurisdictions and do not have the capacity to teach each specific attendee the applicable Laws or Rules for their particular jurisdiction. Please make sure you follow any guidelines presented to you by your supervisors when working claims in any location.
The hypothetical situations contained in this book are for the purpose of testing your ability to make decisions as part of the training in this course, only. Such situations are not intended to make or address any specific guidelines for “Fair Claim Practices” for any Insurance Carrier or Adjustment Firm.
The topics addressed herein are not covered extensively and this course should not be one’s sole source of information, regarding any specific claim or claim handling situation. A comprehensive review of Fair Claim Practices in any jurisdiction you are working in must be addressed directly and is not part of this curriculum.
This applies to the following insurers whether organized as a proprietorship, partnership, stock or mutual corporation, or unincorporated association:
(1) a life, health, or accident insurance company;
(2) a fire or casualty insurance company;
(3) a hail or storm insurance company;
(4) a title insurance company;
(5) a mortgage guarantee company;
(6) a mutual assessment company;
(7) a local mutual aid association;
(8) a local mutual burial association;
(9) a statewide mutual assessment company;
(10) a stipulated premium company;
(11) a fraternal benefit society;
(12) a group hospital service corporation;
(13) a county mutual insurance company;
(14) a Lloyd’s plan;
(15) a reciprocal or interinsurance exchange; and
(16) a farm mutual insurance company.
What Does the Statute Prohibit:
The statute prohibits engaging in any of the following settlement practices with respect to a claim by an insured or beneficiary:
(1) misrepresenting to a claimant a material fact or policy provision relating to coverage at issue;
(2) failing to attempt in good faith to effectuate a prompt, fair, and equitable settlement of a claim:(a) with respect to which the insurer’s liability has become reasonably clear; or
(b) a claim under one portion of a policy of a claim with respect to which the insurer’s liability has become reasonably clear in order to influence the claimant to settle an additional claim under another portion of the coverage, unless payment under one portion of the coverage constitutes evidence of liability under another portion of the policy;
(3) failing to provide promptly to a policyholder a reasonable explanation of the basis in the policy, in relation to the facts or applicable law, for the insurer’s denial of a claim or for the offer of a compromise settlement of a claim;
(4) failing within a reasonable time to:
(a) affirm or deny coverage of a claim to a policyholder; or
(b) submit a reservation of rights to a policyholder;
(5) refusing, failing, or unreasonably delaying an offer of settlement under applicable first-party coverage on the basis that other coverage may be available or that third parties are responsible for the damages suffered, except as may be specifically provided in the policy;
(6) undertaking to enforce a full and final release of a claim from a policyholdeer when only a partial payment has been made, unless the payment is a compromise settlement of a doubtful or disputed claim;
(7) refusing to pay a claim without conducting a reasonable investigation with respect to the claim;
(8) with respect to a Texas personal auto policy, delaying or refusing settlement of a claim solely because there is other insurance of a different type available to satisfy all or any part of the loss forming the basis of that claim; or
(9) requiring a claimant, as a condition of settling a claim, to produce the claimant’s federal income tax returns for examination or investigation by the person unless:
(a) a court orders the claimant to produce those tax returns;
(b) the claim involves a fire loss; or
(c) the claim involves lost profits or income.