The File That Sat in a Supervisor's Queue
On March 3 an insured reports wind and hail damage to her roof and interior ceiling stains. The company acknowledges the claim in writing on March 12 and inspects on March 18. On March 25 the insurer sends a written request for the contractor's estimate, the mortgagee clause page, and a signed, sworn proof of loss. The insured delivers all three items on April 20. The field report is finished April 28, but the file sits with a supervisor for review. On June 2 the company pays $14,200 for the roof and denies the ceiling-stain portion in writing, citing the water-damage exclusion. Fifteen business days from April 20 ended on May 11. Coverage was in fact owed for the ceiling stains; the correct additional amount is $6,800. The insured's public adjuster has demanded statutory penalties and attorney's fees.
1. Walk through each Chapter 542 deadline in this file and identify which were met and which were missed.
Read the worked answer
| Step | Standard | File |
|---|---|---|
| Acknowledge and begin investigation | Within 15 days of notice | Mar 3 → Mar 12 - met |
| Accept or deny | Within 15 business days after receipt of all requested items | Items complete Apr 20 → due May 11; decision Jun 2 - missed |
| Extension | If more time is needed, written notice within that window stating the reasons, decision within 45 days of the notice, follow-up notices every 45 days | No extension notice in the file - missed |
| Pay | Within 5 business days after notice of settlement | The $14,200 and the $6,800 both ran late - missed |
| Written denial | Must identify the specific policy provision and the facts relied on | Cited the exclusion, but cited it incorrectly |
The request for the contractor's estimate, mortgagee page, and sworn proof of loss was proper and did toll the decision clock - but only until April 20. Review time in a supervisor's queue is an internal staffing issue, not a statutory excuse.
2. What statutory and regulatory exposure does this file create, and what is your authority as the adjuster?
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Chapter 542 (Prompt Payment of Claims) exposes the carrier to 18% annual interest on the claim amount, running from the date payment should have been made, plus reasonable and necessary attorney's fees. Interest runs on at least the $14,200 from late May, and on the $6,800 from the date it should have been paid.
Because the partial denial rested on a misread exclusion, the file also supports Chapter 541 theories: misrepresenting policy provisions and failing to effectuate a prompt, fair settlement once liability and damages were reasonably clear. Chapter 542A adds a pre-suit notice requirement but cures nothing about the late decision.
Your authority as an adjuster: you do not concede penalties, interest, attorney's fees, or extra-contractual exposure, and you do not negotiate a release on your own. Your job is to (1) document the timeline accurately, including who held the file and why, (2) escalate in writing to your manager and the carrier's compliance or legal group the same day, and (3) pay the undisputed amount immediately - delay stacked on delay compounds the exposure.
3. You discover the ceiling-stain denial rested on a misreading of the exclusion. What must you do, and how does the timing affect the exposure?
Read the worked answer
Correct it immediately and in writing.
- Reopen and pay the $6,800 the same day (and the $14,200 if it has not issued).
- Send a written explanation of the change identifying the correct policy language. Never leave a wrong denial standing in the file.
- Document the timeline honestly - what was misread, by whom, when it was discovered, and what you did. Do not revise or backdate notes; an altered file is far worse than a late one.
- Escalate, because the statutory clock already ran and the erroneous denial may support interest, fees, and a Chapter 541 theory.
The presence of a public adjuster does not change the duties; it changes the channel of communication - put everything in writing to the representative of record. A voluntary early payment does not erase missed deadlines, but it limits the running interest and is evidence of good faith.