Start by getting the denial and its reason in writing, then match your response to who denied the claim. A denial by the other driver's insurer is answered with evidence or a lawsuit against the driver. A denial by your own insurer is governed by Insurance Code deadlines and can carry extra damages if it was unreasonable. Owsley Law Firm reviews denied claims free.
A denial letter feels final. In most Texas car accident cases it is not. It is the insurer's position at that moment, based on the file it has, and positions change when the evidence changes or a lawsuit is filed.
The most important question is who issued the denial. Texas law treats the at-fault driver's insurer and your own insurer very differently. One owes you nothing but the possibility of a settlement on behalf of its driver. The other owes you contract benefits and statutory duties with deadlines and penalties.
Who denied my claim, and why does it matter?
A third-party denial and a first-party denial have different rules, deadlines, and remedies.
If you were hit by another driver and that driver's insurer denied your claim, you have a third-party claim. The insurer is deciding whether to pay on behalf of its insured. Its denial does not end your right to sue the driver, and the case is ultimately decided by a judge or jury, not the adjuster.
If your own insurer denied PIP, uninsured or underinsured motorist, collision, or medical payments benefits, you have a first-party claim. Insurance Code chapter 542 sets deadlines for handling it, and chapter 541 prohibits unfair settlement practices with remedies you can enforce in court.
What deadlines does my own insurer have in Texas?
Chapter 542 sets specific deadlines for first-party claims, starting when the insurer receives notice.
Under the prompt payment rules, which apply to first-party claims (Insurance Code section 542.051), the insurer generally must act on a fixed schedule. If it is not in compliance and is liable for the claim, it owes the claim plus 18 percent annual interest as damages and reasonable attorney's fees under section 542.060, with a different interest rate in the limited cases governed by chapter 542A.
- Within 15 days of notice: acknowledge the claim, begin investigating, and request the items it needs (section 542.055)
- Within 15 business days of receiving those items: accept or reject in writing, with reasons for any rejection (section 542.056)
- If it needs more time: say why within that period, then decide within 45 days (section 542.056(d))
- Within 5 business days of accepting: pay (section 542.057)
- Delay beyond 60 days after receiving the required items generally triggers the statutory damages (section 542.058)
What if the other driver's insurer says its driver was not at fault?
Then the fight is about evidence, and if the insurer will not change its position, a lawsuit against the driver.
Liability denials are common when both drivers tell different stories. They are answered with independent evidence: intersection or business video, neutral witnesses, the officer's crash report, photos of the vehicles and scene, and vehicle data. Business video in particular is often overwritten within days, so it should be requested immediately.
You generally cannot sue the other driver's insurer for an unfair denial; Insurance Code section 541.060(b) withholds that cause of action from third parties, consistent with Allstate Insurance Co. v. Watson (1994). You sue the driver, and the insurer defends and pays within its policy if the driver is found liable.
What if the other driver had no insurance or the policy was cancelled?
Your own uninsured motorist coverage takes over, if you did not reject it in writing.
A denial because the policy lapsed, the driver was excluded, or the car was not covered turns the at-fault driver into an uninsured motorist for your purposes. Insurance Code section 1952.101 requires UM and UIM coverage in every Texas auto liability policy unless the named insured rejects it in writing.
PIP, also included unless rejected in writing under section 1952.152, pays medical bills and lost income regardless of fault, up to its limit. Notify your own insurer promptly of the uninsured claim.
Can I sue my own insurer for a wrongful denial?
Yes, for policy benefits owed and, when the denial was unreasonable, for statutory damages.
A suit can seek the benefits the policy provides. Insurance Code section 541.151 also lets a person who suffers actual damages sue over unfair settlement practices listed in section 541.060, such as refusing to pay without a reasonable investigation or failing to explain a denial. If the insurer acted knowingly, the jury may award up to three times actual damages (section 541.152).
These claims have their own two-year limitations period under section 541.162. For UM and UIM claims, Texas courts require the other driver's liability and underinsured status to be established before the contract duty to pay arises (Brainard v. Trinity Universal, 2006), which affects how and when those suits are brought.
How do I challenge a denial?
Get the reason in writing, fix the gap in the evidence, and escalate in the right forum.
Ask the adjuster to put the denial and the specific reason in writing, and to identify the policy language it relies on. Section 542.056(c) requires your own insurer to state the reasons when it rejects a claim. Then gather the evidence that answers that reason directly.
For your own insurer, you can ask for a supervisor's review, request appraisal if the dispute is about the amount of a property loss, and file a complaint with the Texas Department of Insurance. For the other driver's insurer, the next step after a documented demand is usually a lawsuit against the driver.
When does a denial become a lawsuit?
When the insurer will not move and the filing deadline is approaching, or when the denial is plainly unsupported.
The deadline to sue the at-fault driver for injuries or property damage is generally two years under Civil Practice and Remedies Code section 16.003. Negotiating with an insurer does not stop that clock.
Filing suit often changes the insurer's evaluation, because the claim is now headed toward a jury and lawyers and discovery are involved. Many cases that were denied in the claim stage settle once litigation begins, though no outcome is guaranteed.
Common denial reasons and responses
| Denial reason | Usually comes from | Typical response |
|---|---|---|
| Our driver was not at fault | Other driver's insurer | Video, witnesses, crash report, scene evidence; suit against the driver if needed |
| You were partly at fault | Either | Evidence on fault; Chapter 33 reduces, but does not bar, recovery at 50 percent or less |
| Injury not caused by the crash | Either | Medical records and a treating doctor's causation opinion |
| Policy lapsed or driver excluded | Other driver's insurer | Confirm in writing, then turn to your UM coverage |
| Late notice or no cooperation | Your own insurer | Show notice timing, ask whether the delay actually prejudiced the insurer |
What evidence proves it
- The denial letter and the policy language cited
- All correspondence and a log of calls with adjusters
- The crash report and any citation issued
- Video, photos, and witness information
- Medical records and a doctor's causation opinion
- Your own policy's declarations page and any rejection forms you signed
Mistakes that cost people money
- Treating a denial letter as the final word
- Failing to notify your own insurer of a UM claim after the other insurer denies
- Missing the two-year deadline while appealing informally
- Sending more recorded statements to the insurer that denied the claim
- Assuming the crash report or adjuster decides fault
Frequently asked questions
Can an insurance company deny a claim without explaining why?
Your own insurer must state the reasons when it rejects a claim (Insurance Code section 542.056(c)) and must explain the policy basis for a denial (section 541.060(a)(3)). The other driver's insurer has no comparable duty to you.
Does a denial mean I do not have a case?
No. It means the insurer is not paying now. Many denied claims are resolved later through better evidence or a lawsuit.
Can I file a complaint with the Texas Department of Insurance?
Yes, especially against your own insurer. TDI says it probably cannot help when the other driver's insurer will not accept liability, and it does not decide fault.
How long do I have to sue after a denial?
Generally two years from the crash for claims against the at-fault driver (section 16.003). Claims against your own insurer under chapter 541 must be brought within two years of the unfair act or its discovery (section 541.162).
What if I was partly at fault?
You can still recover if your share is 50 percent or less, reduced by that percentage, under Chapter 33. A denial based on shared fault is often a negotiation position.
Should I hire a lawyer after a denial?
A denial is a good time for a free review, because deadlines, evidence preservation, and the choice of whom to sue all matter. Owsley Law Firm charges no fee unless it wins.
This page is general information about Texas law and is not legal or medical advice. Every case depends on its own facts. Contact the firm for a free review of yours.
Keep reading
What if the insurance company denies my car accident claim?
Can I sue my own insurance company in Texas?
Filing a TDI Complaint Against an Insurer
First-Party vs. Third-Party Claims in Texas
Texas UM/UIM Coverage: Insurance Code 1952.101