New Deadlines and Rules Applicable to Disputing Certain Claims with Texas Windstorm Insurance Association (TWIA)

Since the Texas Windstorm Insurance Association (TWIA) has received thousands of claims from insureds after Hurricane Beryl, we thought it would be helpful to address some of the new rules applicable to disputing TWIA’s claim decision.  In 2023, the Texas Legislature passed several new laws related to TWIA. House Bill 3310 required the Texas Department of Insurance to implement new deadlines that will apply to appraisals demanded on or after January 1, 2024. The Bill amended Section 2210.574 of the Texas Insurance Code, titled “Disputes Concerning Amount of Accepted Coverage,” and the TDI recently enacted new appraisal deadlines for TWIA claims, which are codified in § 5.4211 of the Texas Administrative Code titled “Appraisal Process.”

The Appraisal Process applies when TWIA has accepted coverage for a claim and the claimant disputes the amount TWIA has agreed to pay for the claim. Either party may request appraisal. TWIA must include an explanation of their appraisal process, and the claimant has the right to demand an independent appraisal. Each party must hire an appraiser who is independent and qualified. 

The most important deadline for insureds in TWIA policies was left unchanged—if a claimant wants to dispute the amount of loss TWIA will pay for a claim or a portion of a claim, the insured must demand appraisal not later than the 60th day after the date the claimant receives the notice described by Section 2210.573(d)(1) or (2) (which is typically TWIA’s initial decision letter sent to its insured on the claim). After a major hurricane like Beryl, I’d expect the Texas Department of Insurance to extend this deadline by at least a month—but always check TWIA’s website to make absolutely sure this deadline is not missed.

Below are some of the new deadlines that will apply to appraisal panels, all of which will apply to any TWIA claims in appraisal stemming from Hurricane Beryl:

(e) Deadline for appraisal budget disclosure and naming an umpire. Within 15 days of the date by which the appraisers are named by the parties, the appraisers must disclose their projected fees to the parties and agree on an umpire. If the appraisers cannot agree on an umpire, they may ask the department to select an umpire under subsection (h) of this section. The deadlines in this subsection may be extended as provided by subsection (k) of this section.

(f) Deadline for appraiser agreement. Except as provided by subsection (k) of this section, appraisers must agree on the amount of loss:

  (1) for residential claims, within 90 days of the date by which both appraisers were named; or

  (2) for commercial claims, within 120 days of the date by which both appraisers were named.

(g) Appraiser fee information. No later than five days after hiring an appraiser, each party must tell the other party the fees to be charged by the appraiser.

(h) Umpire selection.

  (1) The appraisers must select an umpire who is independent and qualified under §5.4214 of this title (relating to Appraisal Process - Umpire Qualifications and Conflicts of Interest).

  (2) If the appraisers are unable to agree on an umpire, either appraiser may ask the department to select an umpire. The appraiser must submit the request under §5.4251 of this title (relating to Requests and Submissions to the Department). The request must include the following information:

    (A) the type of policy;

    (B) a description of the claim and, if known, the claimed value of the covered loss;

    (C) the association's claim acceptance letter, including the amount the association will pay for the loss; and

    (D) any other information that the department requests.

(i) Umpire participation. The selected umpire must participate in the resolution of the dispute if the appraisers fail to agree on a decision by the deadlines specified in subsection (e) of this section.

(j) Deadline for appraisal panel decision. Except as provided by subsection (k) of this section, the appraisal panel must decide on the amount of loss:

  (1) for residential claims, within 60 days of the date by which the umpire becomes involved; or

  (2) for commercial claims, within 90 days of the date by which the umpire becomes involved.

(k) Extension of deadlines. The association and the claimant may extend deadlines by written agreement of both parties. The commissioner may also extend deadlines, as provided in §5.4222 of this title (relating to Appraisal Process - Extensions of Deadlines).

(l) Decision. If the appraisers agree on the amount of loss, their decision is binding on the parties as to the amount of loss the association will pay for the claim. If the appraisers cannot agree, and the umpire participates, an itemized decision agreed to by any two of these three is binding on the parties as to the amount of loss the association will pay for the claim. Parties may challenge the decision only as permitted by Insurance Code §2210.574.

(m) New umpire. If a decision is not issued within the deadlines established by subsection (j) of this section, or as extended by subsection (k) of this section, the appraisers may select a new umpire as described in subsection (h)(1) of this section, or either appraiser may ask the department to select a new umpire as described in subsection (h)(2) of this section.

Here are some other important claim-related deadlines that exclusively apply to TWIA policies:

• Policyholders have one year from the date the property was damaged to report a TWIA claim.

• After receiving all the requested information from the policyholder, TWIA has 60 days to investigate and notify the policyholder if it will accept or reject the claim.

• TWIA has 10 days to pay a claim after it has accepted coverage for a claim and the policyholder has provided all requested materials.

Unlike every other private carrier selling insurance in Texas, a completely different set of laws applies to TWIA.  TWIA acts as an insurer of last resort providing residential windstorm and hail coverage along the seacoast territory of Texas. Tex. Ins. Code § 2210.001. Every insurer that is engaged in the authorized business of property insurance in Texas is required by law to participate in TWIA. Members are required to participate in insuring losses and contributing to the operating expenses of TWIA proportionally to the net direct premiums compared to the aggregate of all members from the prior calendar year. The actual policies issued by TWIA are strictly regulated and their terms, rates, and liability limits are largely governed by statute.

We have years of experience helping insureds challenge adverse decisions by TWIA. Unlike most firms, our entire practice is dedicated to helping policyholders get the just compensation they deserve for their properties following storms. We are a nationally recognized bad faith insurance litigation law firm that is familiar with the tactics insurance companies often use to deny or underpay claims.  This past year, in the complicated and specialized professional area of property insurance law, Lundquist Law Firm aggressively litigated policyholders’ claims that were rejected, postponed, or underpaid throughout the nation. Courts have ruled in favor of policyholders thanks to the help of Lundquist Law Firm, emphasizing the obligation of insurance companies to act in good faith and fairly compensate their customers.

To learn more about the legal assistance we can provide on your Hurricane Beryl claim, give us a call at (346) 704-5295, or contact us online.