Auto Insurance Claims Denied in Texas

Understanding your rights and options when your auto insurance claim is denied in the Lone Star State

Why Auto Insurance Claims Get Denied in Texas

Getting into a car accident is stressful enough. When your insurance company denies your claim, it can feel overwhelming. In Texas, insurance companies must follow specific rules when handling claims, but denials still happen for various reasons.

Texas operates under a fault-based insurance system, meaning the at-fault driver's insurance typically pays for damages. However, your own insurance company might deny your claim even when you believe you're covered. Understanding why denials occur and what you can do about them is crucial for Texas drivers.

The Texas Department of Insurance (TDI) regulates insurance companies and provides consumer protections. When insurers violate these rules, you have recourse through the TDI complaint process and potentially through legal action.

Common Auto Claim Denial Reasons in Texas

No Coverage at Time of Loss
Your policy wasn't active when the accident occurred. This often happens with lapsed policies or coverage gaps.
Missed Reporting Deadline
Texas requires prompt accident reporting. Delays can give insurers grounds for denial.
Policy Lapse
Missed premium payments can void coverage, even if you're only a few days late.
Excluded Driver
Someone specifically excluded from your policy was driving at the time of the accident.
Misrepresentation
Inaccurate information on your application, even unintentional, can void your policy.
Non-Covered Use
Using your vehicle for commercial purposes, racing, or other excluded activities.
Failure to Cooperate
Not providing requested documentation or failing to attend required examinations.
Disputed Liability
Disagreement about who was at fault or the extent of damages.
Excluded Vehicle
Damage to vehicles specifically excluded from your policy coverage.
Coverage Limits Exceeded
Your claim amount exceeds the maximum coverage limits in your policy.

Key Texas Auto Insurance Laws & Deadlines

Texas Insurance Code Requirements

Texas Insurance Code Chapter 542 sets strict requirements for insurance companies handling claims. These laws protect consumers and establish clear timelines that insurers must follow.

15-Day Acknowledgment Rule: Insurance companies must acknowledge receipt of your claim within 15 days of receiving it. They must also provide you with necessary claim forms and instructions.
15-Day Investigation Start: Insurers must begin investigating your claim within 15 days after receiving all required information from you.
15-Business-Day Decision: After receiving all necessary documentation, insurance companies have 15 business days to accept or deny your claim in writing.
5-Day Payment Rule: If your claim is approved, payment must be made within 5 business days after you accept the settlement offer.

Texas Minimum Coverage Requirements

Texas law requires all drivers to carry minimum liability coverage:

$30,000 per person for bodily injury
$60,000 per accident for bodily injury
$25,000 per accident for property damage

This is commonly referred to as 30/60/25 coverage. Driving without this minimum coverage can result in fines, license suspension, and vehicle impoundment.

Statute of Limitations

In Texas, you have two years from the date of the accident to file a lawsuit for personal injury or property damage. This deadline applies to claims against other drivers and potentially against your own insurance company for bad faith denial.

What to Do Immediately After a Denial

Request Written Explanation. Ask your insurance company for a detailed written explanation of why your claim was denied. They must provide specific reasons under Texas law.
Review Your Policy. Carefully read your insurance policy to understand your coverage, exclusions, and the insurer's obligations. Look for any clauses that might support your claim.
Gather Documentation. Collect all relevant documents: police reports, photos, witness statements, medical records, repair estimates, and correspondence with your insurer.
File an Internal Appeal. Most insurance companies have an internal appeals process. Submit your appeal in writing within the deadline specified in your denial letter.
Document Everything. Keep detailed records of all communications with your insurance company, including dates, times, and names of representatives you speak with.

Appeals & Complaints in Texas

Internal Insurance Appeals

Start with your insurance company's internal appeals process. Texas law requires insurers to provide this option. Submit your appeal in writing, including:

Your policy number and claim number
Specific reasons why you believe the denial was incorrect
Supporting documentation and evidence
Reference to specific policy provisions

Texas Department of Insurance Complaint

If internal appeals fail, file a complaint with the Texas Department of Insurance. The TDI can:

Investigate your complaint
Mediate disputes between consumers and insurers
Impose penalties on companies that violate insurance laws
Provide guidance on your rights and options

File complaints online at www.tdi.texas.gov or call 1-800-252-3439.

External Review Process

For certain types of disputes, particularly those involving coverage interpretations, you may request an independent external review. This process involves a neutral third party reviewing your case.

Legal Action

If your insurance company acted in bad faith by unreasonably denying your claim, you may have grounds for a lawsuit. Texas allows consumers to sue for:

The original claim amount
Additional damages for bad faith
Attorney's fees and court costs
Punitive damages in extreme cases

FAQs

How long does an insurance company have to respond to a claim in Texas?

Texas law requires insurance companies to acknowledge your claim within 15 days, begin investigation within 15 days, and accept or deny the claim within 15 business days after receiving all necessary information. They must pay accepted claims within 5 business days.

What should I do if my auto insurance claim is denied in Texas?

Request a written explanation of the denial, review your policy carefully, gather supporting documentation, file an internal appeal with your insurer, and if necessary, file a complaint with the Texas Department of Insurance.

Can I sue my insurance company for denying my claim in Texas?

Yes, you can file a lawsuit if your insurance company wrongfully denies your claim. Texas allows bad faith insurance claims, and you may be entitled to the original claim amount plus additional damages if the denial was unreasonable.

Your Rights as a Texas Consumer

Texas law provides strong protections for insurance consumers. You have the right to:

Prompt and fair claim handling
Clear explanations of claim denials
An internal appeals process
File complaints with the Texas Department of Insurance
Seek legal remedies for bad faith denials

Don't let insurance companies intimidate you or pressure you into accepting unfair denials. Stand up for your rights and use the resources available to you through the Texas Department of Insurance and the legal system.

From our Blog – Texas

Next Step for Texas Claim Denials

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About this page

Updated 2026-05-26. Content is informational and written for people dealing with real claim denials.

Reviewed by the WhyClaimDenied editorial team. See About for scope and sourcing.