Texas hail and wind claim deadlines for commercial property

Texas claim deadlines at a glance

Notice to the insurer

The ISO Building and Personal Property Coverage Form (CP 00 10, October 2012 edition) requires prompt notice of the loss with a description of the property and, as soon as possible, how, when and where the damage occurred.⁵

In Texas, the chapter 542 clock starts when the insurer receives a "notice of claim": any written notification that reasonably tells the insurer the facts of the claim. An insurer that acknowledges a claim other than in writing must record the date, manner and content.⁶

A policy can't make the notice window unreasonably short. TDI's commercial property form checklist lists Texas Civil Practice and Remedies Code 16.071: a contract term requiring notice of a claim as a condition of the right to sue must be reasonable, and one requiring notice in less than 90 days is void.¹⁰

TWIA's one-year rule and the good cause extension

On the Texas coast and in Harris County on Galveston Bay, TDI says a commercial policy probably doesn't cover wind and hail; the Texas Windstorm Insurance Association (TWIA) offers that coverage, so its deadline is the one many coastal owners face.¹¹

Every TWIA policy must require a claim no later than the first anniversary of the date the damage occurred. The commissioner of insurance may extend that by up to 180 days on a showing of good cause.^2,3

TDI rule 28 TAC 5.4202 defines good cause as objective facts beyond the insured's control that reasonably caused the missed deadline. An extension starts when the one-year period ends, can be any length up to 180 days, and covers only that claim.³

• The request goes to TDI in writing, describes the good cause and is signed by the insured or a legal representative.³
• Supporting documents may be included but are not required; TDI said it accepts each request's assertions as true.³

Other insurers on the coast

Texas Insurance Code 2301.010 covers insurers that write wind and hail in the catastrophe area defined in the TWIA law. Their commercial property forms may require a claim within one year of the loss but must allow later claims for good cause, and the insurer must disclose the period in writing at issue or renewal.⁴

Time limits to sue

Commercial property policies also set a deadline for suing the insurer, and state law limits how short it can be.

The ISO Commercial Property Conditions form (CP 00 90, July 1988 edition) bars legal action unless the policy terms have been fully met and the action is brought within 2 years after the date on which the direct physical loss or damage occurred.¹²

TDI's commercial property form checklist cites Civil Practice and Remedies Code 16.070: a contract term setting a time limit to sue shorter than two years is void in Texas. It notes a Third Court of Appeals opinion accepting "2 years and 1 day from the date the cause of action first accrues".¹⁰

For catastrophe-area wind and hail insurers in Texas, 2301.010 allows a suit limit that ends no earlier than 2 years after the insurer accepts or rejects the claim or 3 years after the loss, whichever comes first.⁴

Surplus lines and catastrophe extensions

In Texas, chapter 542 also covers eligible surplus lines insurers, with longer clocks to acknowledge (30 business days) and pay (20 business days). A TDI catastrophe declaration extends chapter 542 deadlines by 15 days for the named counties and dates.⁶

Records that help meet the deadlines

• The storm date. TWIA's deadline, the 2301.010 claim term and the ISO suit clause all count from the date of damage or loss.^2,4,12
• NOAA reports for that date. SPC posts preliminary reports by day (1200 UTC to 1159 UTC); NCEI adds Storm Data, the official record, 75 to 90 days after each month ends, and only for weather strong enough to cause deaths, injuries, significant property damage or disruption to commerce, or that is unusual and rare.^13,14
• A dated copy of the written notice of claim, which starts the chapter 542 clock.⁶
• The insurer's acknowledgment and list of requested items, and the date each item was sent; the decision clock starts once all requested items arrive.⁶
• A record of expenses to protect the property from further damage, which the ISO form requires.⁵
• The insurer's list of claims and payments on the policy, which it must provide within 30 days of a written request.⁶
• For TWIA: policy number, cause (wind, hail or both), a description, and photos or documents.¹