TX Claims Adjuster common mistakes
TX Claims Adjuster · Understand the traps and how to avoid them.
Choosing 'void the policy' for any incorrect answer on an application, including an innocent mistake about a prior loss.
Misrepresentation and material misrepresentation are studied together, so candidates apply the harshest remedy to every inaccuracy.
What to do instead
Ask whether the statement was material to the insurer's decision and whether it was made with intent to deceive; Texas generally requires materiality before rescission.
Selecting 'waiver' when an insurer's statement caused the insured to rely on coverage, rather than 'estoppel'.
The terms are taught as a pair and both involve giving up a right, so candidates treat them as interchangeable.
What to do instead
Waiver is the voluntary relinquishment of a known right; estoppel prevents a party from asserting a right after the other party reasonably relied on its conduct.
Answering that the insurer has 30 days to acknowledge a claim.
Candidates carry over general or multi-state timelines instead of using the Texas prompt-payment statute.
What to do instead
Memorize Texas Insurance Code Chapter 542: 15 days to acknowledge and request information, 15 days to accept or deny after all information is received, and 5 business days to pay after settlement; a 45-day extension is available if notice is given.
Assuming a non-resident adjuster license or an out-of-state license is automatically valid for Texas claims.
Reciprocity is mentioned in licensing chapters, so candidates skip the application requirement and assume automatic authority.
What to do instead
Texas requires a non-resident license through TDI, or an emergency license during a declared catastrophe; verify the license type before working the claim.
Paying the full covered loss on a commercial building policy when the insured carried less insurance than the coinsurance percentage required.
Candidates focus on the policy limit and forget that the coinsurance clause reduces recovery when the insured is underinsured.
What to do instead
Calculate the coinsurance penalty: (carried limit divided by required limit) times the loss, capped at the policy limit; required limit equals the coinsurance percentage times replacement cost.
Paying the entire loss when a covered wind peril and an excluded flood peril both contributed to the damage under an anti-concurrent causation clause.
Adjusters see wind damage and assume the whole loss is covered without reading the exclusion wording.
What to do instead
Read the exclusion and anti-concurrent causation language; if the clause bars loss caused by or resulting from an excluded peril regardless of sequence, exclude the flood-caused portion and document the allocation.
Applying actual cash value to a total loss of a dwelling caused by fire instead of paying the policy limit under the Texas valued policy law.
Candidates apply ACV and replacement cost rules uniformly without recognizing the Texas statutory exception for total fire losses of real property.
What to do instead
For a total loss of real property by fire, Texas values the loss at the policy amount; confirm the loss is total, the property is real property, and the peril is fire.
Covering a liability claim that was first reported after a claims-made policy expired.
Candidates treat claims-made policies like occurrence policies and focus only on when the injury happened.
What to do instead
Check the claims-made and reported trigger and any extended reporting period; a claim reported after expiration is generally not covered absent an ERP.
Denying recovery because the claimant was 10% at fault, applying contributory negligence as a complete bar.
Many states and older common-law rules use contributory negligence, and candidates import that rule into Texas questions.
What to do instead
Texas uses modified comparative responsibility: a claimant 50% or less at fault may recover reduced damages; only above 50% is barred.
Denying or settling a claim without a written explanation that cites the policy provisions relied on.
Adjusters handle claims by phone and assume verbal notice or a file note is enough to satisfy the claim-handling requirements.
What to do instead
Send a written denial or reservation of rights that identifies the policy language and factual basis; document the file with the explanation and supporting evidence.