In Texas, you file a landlord insurance claim after a covered peril that causes damage or loss hits your home or an apartment building, or there is a liability claim from your tenant or a visitor.
The most common landlord insurance claims in Texas are:
In such a situation:
To file a claim on your landlord policy, contact your property insurance agent who helped you purchase the coverage to inform them about the loss incurred on your insured rental property. If it is also a personal liability claim which involves bodily injury or lawsuit, you still have to inform your property insurance agent. Follow these steps to file a claim for landlord insurance in Texas:
When there is a need to file a landlord insurance claim that has to do with bodily injury, there are two types of coverage that can be used to cover the claim. They are:
Medical payments coverage
This coverage is meant to cover the medical cost of treating a third party that sustains bodily injuries on your rental property despite the fact that you are not responsible for the injury. Here, the cause of the accident that leads to the personal injury cannot be linked to your negligence and you are not liable.
Regular liability insurance coverage
Basic policy (personal) liability protection covers the medical expenses of people who get injured on your rental property as a result of your negligence. You become liable to cover their medical bills because the accident can be avoided if you take or provide some precautions. Liability coverage also pays for the attorney representation. (Note: If a separate policy umbrella coverage is used, the excess claim amount is filed through the umbrella liability insurer. If the optional coverage is purchased using the same company - the claim process can be more streamlined.)
Your insurer confirms the receipt of your claim and appoints an insurance adjuster to investigate your claim. Your insurer will use the adjuster's report to accept, deny, or readjust your claim, and their decision is communicated to you. If your insurer accepts or readjusts your claim, your insurer will pay you the amount required to fix your property or to settle the liability claims.
The third key component to the landlord claims is the optional coverage of Loss of Rental income.
Loss of Rent coverage
Even though rent loss insurance coverage differs, the claim is usually calculated based on the date through which the rent was paid up by the tenants. To process the claim, the landlord usually needs to submit copies of several documents, which help establish the timeline and the stream of rent that needs to be replaced:
Lease agreement - to show the agreed upon rate of rent,
Rent accounting ledger - showing the frequency and history of rental payments prior to the covered event,
Notices that were communicated to the tenants,
An estimate of the costs that the tenant is liable for at the end of the lease (if any),
If the property has been already repaired and new tenants are being sought for or they have already moved in, in order to properly cover the claim, the insurer may also request:
Copy of the ad advertising the property for rent
Copy of a rental agreement for the newly moved in tenants
To get help with filing a claim, speak with your insurance agent who helped you obtain the coverage or reach out to your insurer and speak with a staff agent.
No, a claim is not a bill in landlord insurance in Texas. A claim is an official request you make to your insurer to inform them of the occurrence of covered loss, damage to your property, or liability caused by a covered peril so that your insurer can cover the cost. A bill, on the other hand, shows the amount required to fix the damages incurred and to settle medical expenses, if someone is injured on your property, or legal fees if someone (a tenant or third party) sues you.
However, a bill can also serve as a claim. For instance, if somebody is injured on your rental property and you have to cover the medical expenses, the medical bill which contains all the treatments that the individual receives can be sent to your insurer. This way, the bill is serving as a claim which may be initiated by a third party (the injured). When this happens, your insurer must contact you before the claim is paid.
The amount you agree to pay as a deductible determines how much of the provider’s bill your landlord insurance will cover. If your insurer accepts your claim without contesting it, they will subtract your deductible from the bill, and pay what is left. The deductible is the amount of money you are obligated to pay toward an insured loss. For instance, if you file a claim of $5,000 and your deductible is $1,500, your insurer will pay you $3,500, and you will have to pay the remaining $1,500 out of pocket.
Contact your insurer immediately in the event of a peril that results in damage to your insured rental property or when there is a liability claim that you are responsible for because it involves your rental property. You need to check your insurance policy to know the time frame your insurer gives you to file your claim. According to the Texas Insurance Code, you have two years to file your claim, and if you fail to file your claim within this period, you might not be able to file it again.
When you file your landlord insurance claim in Texas, your insurer will assign it to an insurance adjuster who will examine your insurance claim in relation to your policy. The adjuster will make a recommendation to your insurer either for acceptance, rejection, or readjustment of the claim after investigating your loss. Your insurer has a period of 15 business days to investigate your loss and inform you whether your claim is accepted or denied.
If the adjuster reports that your claim is covered after coming to inspect your property for the loss, the adjuster will determine what your insurer will pay you. This may be the exact amount in your claim or less. After this, your insurer must pay you your claim in part or full within five business days. If your insurer fails to pay the claim within five business days, you can sue them.
Consult with a knowledgeable Texas-licensed landlord insurance agent if you have any issues with your insurance company after filing a claim in Texas.
In Texas, landlord insurance carriers pay out claims by issuing checks to the insured landlords directly or to their mortgage lenders if there is a mortgage on their insured rental properties. If your claim payout check is issued in favor of your mortgage lender, you can get it from your mortgage lender to fix or replace what was damaged or stolen or settle your liability claims.
Once your claim is accepted, your insurer has five business days to pay the claim. If your insurer fails to pay the claim within the period, you can challenge their decision and even file a complaint with the Texas Department of Insurance. Speak with your property insurance agent in Texas if you want to challenge your insurer's decision. Your Texas-licensed landlord insurance agent can advise you on how to go about it.
Yes, a landlord insurance company can refuse to pay a claim. Your insurer has the right to refuse to pay a claim for reasons that have to do with the claim itself, such as the claim being fraudulent or not within the scope of the policy. However, you can challenge the decision of your insurer if you are not satisfied with their refusal by:
Landlord insurance claim denial reasons: Landlord insurance companies typically deny insurance claims for any of the following reasons:
The top reasons why your landlord insurance claim may be denied for payment in Texas are:
For property damage and theft, the amount of money that your insurer will pay out as a claim for your landlord insurance depends on three factors:
Coverage Type: Your landlord insurance may be that your insurer should pay the replacement cost value (RCV) or the actual cash value (ACV) of the rental property. If it is the replacement value coverage you opt for, your insurer will pay you the exact amount of money that will cover the replacement cost of the property to its original state. If it is actual cash value, your insurer will consider depreciation to pay the claim. Therefore, your insurer deducts the depreciation value from the property and pays you its current value.
Coverage Limits determine the maximum amounts of coverage offered by the policy. For example, the average liability coverage limit range for most landlord insurance policies in Texas is $200,000 - $300,000. With this amount of coverage, the payout for liability claims can go as high as $300 thousand per claim.
A deductible is what you agree to pay out of your pocket if there is a claim. For instance, you agree to pay $1,000 as a deductible. If you have a claim for a property damage worth $10,000, your insurer will pay you $9,000 if you have replacement value coverage. If you have actual cash value coverage and the cost of the property is now $7,000 as a result of depreciation, your insurer pays you $6,000. In either case, the remaining $1,000 comes from your pocket. Under home insurance, deductibles are applicable to property damage only. Therefore, you are not expected to pay any deductible towards settling any personal liability or loss of income claim.
The Texas Department of Insurance states the steps you can take if your insurer is not paying enough for your claim.
Landlord insurance carriers in Texas have a maximum of 15 business days to investigate any rental property insurance claim you submit to them. They have to get back to you within this time limit to let you know whether your claim has been accepted, declined, or needs to be modified. If your claim is accepted, your insurer has five business days to send you a check to pay you in full or part.
Your insurer should contact you within 15 business days to let you know the status of your claim. However, if you do not hear from your insurer within this period, you can:
Yes, you need to tell your landlord insurance company if someone maliciously destroys your personal or rental property. Malicious vandalism is one of the perils that rental property insurance covers in Texas. Therefore, you need to tell your insurer about it so that they can cover the cost of restoring your property to its initial state. Contact your licensed agent or your property insurance company to help with the claims process.
It is advisable not to file any rental property insurance claim if:
Speak with a knowledgeable and licensed property insurance agent in Texas who can advise you on when not to file claims.