FIRST-PARTY PROPERTY DAMAGE DEMAND LETTER

State of Texas

[LAW FIRM LETTERHEAD]

PRIVILEGED AND CONFIDENTIAL
SETTLEMENT COMMUNICATION - FOR RESOLUTION PURPOSES ONLY
PROTECTED UNDER TX RULES OF EVIDENCE AND F.R.E. 408

VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED
AND VIA EMAIL TO: [ADJUSTER_EMAIL]

Date: [DATE]

[INSURANCE_COMPANY_NAME]
[PROPERTY_CLAIMS_DEPARTMENT_ADDRESS]
[CITY], [STATE] [ZIP]

Attention: [ADJUSTER_NAME], [ADJUSTER_TITLE]
Re: FORMAL DEMAND FOR PROPERTY DAMAGE CLAIM - TEXAS LAW
Insured: [INSURED_NAME]
Property Address: [PROPERTY_ADDRESS]
Policy Number: [POLICY_NUMBER]
Claim Number: [CLAIM_NUMBER]
Date of Loss: [DATE_OF_LOSS]
Type of Loss: [LOSS_TYPE]
Coverage Limits: [COVERAGE_LIMITS]
Response Deadline: [RESPONSE_DEADLINE]

Dear [ADJUSTER_NAME]:

I. INTRODUCTION AND NATURE OF DEMAND

This firm represents [CLIENT_NAME] ("our client") in connection with the above-referenced property damage insurance claim arising under Texas law. This letter constitutes a formal demand for payment of all policy benefits owed for covered losses sustained at [PROPERTY_ADDRESS].

Having represented policyholders in Texas for decades, the pattern in this case is all too familiar: a legitimate claim, a covered loss, and an insurer that has [DELAYED PAYMENT/UNDERVALUED THE LOSS/DENIED COVERAGE WITHOUT JUSTIFICATION].

II. TEXAS PROPERTY INSURANCE LAW

A. Prompt Payment Requirements

Under Texas law:

Tex. Ins. Code Chapter 542 - 15 days to acknowledge, 60 days to accept/reject, 5 business days to pay after acceptance; 18% interest penalty

B. Appraisal Provisions

Tex. Ins. Code Chapter 542A (residential property); SB 458 (2025) mandates appraisal clause in personal auto and residential policies

C. Bad Faith Standard

Texas provides remedies under Insurance Code Chapter 541 (unfair practices) and common law bad faith. First-party bad faith requires showing insurer had no reasonable basis to deny/delay claim and knew or should have known. USAA v. Menchaca, 545 S.W.3d 479 (Tex. 2018). Prompt Payment Act (Chapter 542) provides 18% interest penalty.

D. Available Remedies

Actual damages under Chapter 541, 18% penalty interest under Chapter 542, treble damages (up to 3x actual), and attorney fees

III. POLICY INFORMATION AND COVERAGE

A. Policy Details

B. Applicable Coverage and Limits

C. Coverage Analysis

The loss is clearly covered under Texas law interpretation principles because:

1. The cause of loss is a covered peril
2. The damage occurred during the policy period
3. The property is covered property
4. No exclusions apply
5. All policy conditions have been satisfied

IV. THE LOSS EVENT

A. Description of Loss

On [DATE_OF_LOSS], the insured property at [PROPERTY_ADDRESS] sustained significant damage due to [DESCRIBE_LOSS_EVENT].

[DETAILED_NARRATIVE]

B. Cause and Origin

The cause of the loss was:

• Fire (accidental/electrical/HVAC/other)
• Water damage (plumbing/appliance/roof/storm)
• Wind/Windstorm
• Hail
• Hurricane/Named Storm
• Tornado
• Lightning
• Theft/Vandalism
• [OTHER_CAUSE]

C. Mitigation Efforts

Our client took immediate steps to mitigate damage as required under Texas law:

V. CLAIM HISTORY AND INSURER'S RESPONSE

A. Claim Timeline

B. Insurer's Position and Our Response

[CARRIER_SHORT_NAME] has [DESCRIBE_INSURER_POSITION].

This position is unreasonable under Texas law because [EXPLAIN_WHY_WRONG].

VI. DAMAGES AND CLAIMED AMOUNTS

A. Dwelling Damage (Coverage A)

B. Other Structures (Coverage B)

$[TOTAL_OTHER_STRUCTURES]

C. Personal Property (Coverage C)

D. Loss of Use (Coverage D)

E. Claim Summary

VII. OVERHEAD AND PROFIT

Our client is entitled to general contractor overhead and profit because:

• The repairs require coordination of multiple trades
• The scope and complexity exceeds simple repairs
• A general contractor is reasonably necessary
• Industry standard is [___]% overhead and [___]% profit

[CARRIER_SHORT_NAME]'s refusal to include O&P is contrary to Texas law and industry standards.

VIII. APPRAISAL DEMAND (IF APPLICABLE)

A. Invoking Appraisal

Due to [CARRIER_SHORT_NAME]'s failure to fairly evaluate this claim, we hereby invoke the appraisal process under the policy and Texas law.

We appoint [APPRAISER_NAME] as our client's appraiser.

Please provide [CARRIER_SHORT_NAME]'s appraiser within [NUMBER] days.

B. Scope of Appraisal

The following items are submitted to appraisal:

• Amount of loss to dwelling (Coverage A)
• Amount of loss to other structures (Coverage B)
• Amount of loss to personal property (Coverage C)
• [SPECIFIC_DISPUTED_ITEMS]

Note: Coverage questions are reserved for litigation.

IX. STATUTORY VIOLATIONS AND BAD FAITH

A. Texas Prompt Payment Violations

[CARRIER_SHORT_NAME] has violated Tex. Ins. Code Chapter 542 - 15 days to acknowledge, 60 days to accept/reject, 5 business days to pay after acceptance; 18% interest penalty by:

• [VIOLATION_1]
• [VIOLATION_2]
• [VIOLATION_3]

B. Unfair Claims Settlement Practices

[CARRIER_SHORT_NAME] has violated Tex. Ins. Code Chapter 541 by:

• Misrepresenting pertinent facts or policy provisions
• Failing to acknowledge and act promptly on communications
• Failing to adopt reasonable investigation standards
• Not attempting good faith settlement when liability is clear
• Compelling litigation by offering substantially less than owed
• Failing to provide reasonable explanation for denial/delay

C. Bad Faith

Under Texas law:

Texas provides remedies under Insurance Code Chapter 541 (unfair practices) and common law bad faith. First-party bad faith requires showing insurer had no reasonable basis to deny/delay claim and knew or should have known. USAA v. Menchaca, 545 S.W.3d 479 (Tex. 2018). Prompt Payment Act (Chapter 542) provides 18% interest penalty.

Available remedies include: Actual damages under Chapter 541, 18% penalty interest under Chapter 542, treble damages (up to 3x actual), and attorney fees

X. DEMAND

A. Monetary Demand

We demand payment of $[TOTAL_DEMAND]:

XI. RESPONSE DEADLINE AND CONSEQUENCES

This demand must be accepted by 5:00 p.m. [TIME_ZONE] on [RESPONSE_DEADLINE].

Consequences of Non-Response

If [CARRIER_SHORT_NAME] fails to accept this demand:

1. Litigation will be filed in Texas seeking:
   - All policy benefits
   - Statutory penalties and interest
   - Bad faith damages
   - Punitive damages (where available)
   - Attorney's fees and costs

2. Regulatory complaints will be filed with:
   - Texas Department of Insurance, P.O. Box 149104, Austin, TX 78714
   - National Association of Insurance Commissioners

3. Appraisal will be invoked (if not already)

XII. DOCUMENT PRESERVATION NOTICE

This letter serves as notice to preserve all documents and ESI related to this claim.

XIII. CONCLUSION

[CARRIER_SHORT_NAME] sold our client a policy promising protection against property losses. That loss has occurred. The coverage is clear. The only thing missing is payment.

Respectfully submitted,

[LAW_FIRM_NAME]

By: _______________________________
[ATTORNEY_NAME]
[BAR_NUMBER]
[ADDRESS]
[CITY], TX [ZIP]
[PHONE]
[EMAIL]

Counsel for [CLIENT_NAME]

ENCLOSURES:
- Policy declarations page
- Relevant policy provisions
- Contractor estimates
- Photographs of damage
- Personal property inventory
- Supporting documentation

CC:
- [CLIENT_NAME]
- [MORTGAGEE_NAME] (if applicable)
- Texas Department of Insurance, P.O. Box 149104, Austin, TX 78714

TEXAS PROPERTY INSURANCE LAW QUICK REFERENCE