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If the insurance company denies your claim, you still have options. You can challenge the denial or file a lawsuit to recover compensation. A denial is not the end of your case, but waiting too long to act can limit your ability to recover. After a Texas car accident or other injury, speaking with a personal injury attorney as soon as possible can help you protect your rights and take the right next step. Scott Scherr, a Bryan, TX personal injury attorney at The Payne Law Group, can review your denial letter and chart the strongest path forward.
Why Do Insurance Companies Deny Personal Injury Claims?
Insurance companies are for-profit businesses, and every dollar paid out on a claim comes off the bottom line. Understanding why your claim was denied is the first step toward overturning the decision. In Bryan and across Texas, some of the most common reasons for denial include:
- Disputed liability. The insurer argues that their policyholder was not at fault, or that you share enough fault to reduce or eliminate your recovery under Texas’s proportionate responsibility rules.
- Lapsed or insufficient coverage. The at-fault driver’s policy may have lapsed, or the coverage limits may not be enough to cover your damages.
- Delayed reporting. A long gap between the accident and your claim can give the insurer an opening to question how serious your injuries really were.
- Pre-existing conditions. The insurer claims your injuries existed before the accident and are unrelated to the crash.
- Insufficient documentation. Missing medical records, an incomplete police report, or thin photographic evidence can all be cited as grounds for denial.
Read the denial letter carefully. The stated reason shapes your strategy. For example, a liability dispute calls for a different response than a documentation gap or a pre-existing-condition argument.
First-Party vs. Third-Party Claims: Why It Matters After a Denial
Texas law treats your options very differently depending on whose insurance company denied the claim. This distinction drives every decision you make next.
A first-party claim is one you make under your own policy. Examples include Personal Injury Protection (PIP), MedPay, collision coverage, and uninsured/underinsured motorist (UM/UIM) coverage claims. With a first-party claim, you have a direct contractual relationship with your insurer and Texas law imposes specific deadlines and remedies on how that insurer handles your claim.
A third-party claim is one you make against someone else’s insurance company, typically the at-fault driver’s liability carrier. You are not that insurer’s policyholder, so you have no contract with them. Texas courts have held that a third-party tort claimant generally cannot sue the at-fault driver’s insurer directly under the Texas Insurance Code’s bad faith provisions (see Allstate Insurance Co. v. Watson, 876 S.W.2d 145 (Tex. 1994)). The realistic remedy in a third-party situation is to negotiate a better settlement or file a personal injury lawsuit against the driver who caused the crash.
If the At-Fault Driver’s Insurer Denied Your Claim
When the other driver’s liability insurance company denies your claim, you have three realistic options:
Send a Demand Letter
Send a renewed, evidence-backed demand. The first denial is often a negotiating posture, not a final answer. A demand letter that responds directly to the stated reason for denial, supported by updated medical records, expert opinions, accident-reconstruction evidence, witness statements, or photographs, can prompt the insurer to reopen the file. Send by certified mail and document everything.
Sue the At-Fault Party
File a personal injury lawsuit against the at-fault driver. Under Texas Civil Practice & Remedies Code §16.003, you generally have two years from the date of the accident to file. Filing suit names the driver, not the insurer, but the insurer is contractually obligated to defend and indemnify their insured up to policy limits. A lawsuit also unlocks discovery, which often reveals weaknesses in the insurer’s denial.
File a Claim with Your Insurance Provider
Look at your own policy for UM/UIM coverage. If the at-fault driver was uninsured or underinsured, or if liability is disputed, your own underinsured motorist coverage may pay the difference. A UM/UIM claim is a first-party claim against your own insurer, and that opens up the protections discussed in the next section.
If Your Own Insurer Denied a First-Party Claim
Denials of first-party claims, such as PIP, MedPay, UM/UIM, or collision claims, sit in a stronger legal framework. Texas law imposes strict timelines and remedies that do not apply to third-party situations.
Request an internal appeal. Most insurers have a formal internal appeals process. Submit a written appeal that addresses the denial reason and includes additional evidence supporting your claim. Send it by certified mail.
File a complaint with the Texas Department of Insurance (TDI). While TDI accepts complaints from third-party claimants and can review insurer conduct, its strongest regulatory tools apply to disputes with your own insurer. In a third-party situation, TDI review may be a secondary avenue but is not a substitute for direct legal action.
Pursue a Texas Insurance Code claim. Two parts of the Texas Insurance Code give first-party policyholders powerful leverage:
Chapter 541 (Unfair Settlement Practices)
Insurers handling first-party claims are prohibited from unfair or deceptive practices, including misrepresenting policy provisions, failing to attempt a prompt and fair settlement when liability is reasonably clear, and refusing to pay a valid claim without a reasonable investigation. A policyholder who proves the insurer knowingly violated Chapter 541 may recover up to three times the actual damages, plus attorney’s fees and court costs.
Chapter 542 (Prompt Payment of Claims Act)
For first-party claims, the insurer must acknowledge the claim within 15 days, accept or reject it not later than the 15th business day after receiving all items needed to secure final proof of loss, and pay accepted claims within five business days. If the insurer violates these deadlines, it owes 18 percent annual interest on the amount of the claim, plus reasonable and necessary attorney’s fees.
These statutory protections do not extend to third-party liability claims. If you are unsure which category your claim falls into, Scott Scherr can review the policy and the denial letter and tell you exactly what tools are on the table.
What Counts as Bad Faith in Texas?
Bad faith is more than a denied claim. It is conduct that crosses the line from permissible disagreement into unfair dealing. Texas recognizes both common-law bad faith (the insurer’s duty of good faith and fair dealing toward its own policyholder) and statutory bad faith under Chapter 541. Both apply in the first-party context.
Insurers are allowed to deny claims they genuinely believe are not covered. The line is crossed when a denial contradicts the policy language, ignores clear evidence, follows a pattern of delay and obstruction, or rests on no reasonable basis at all. Whether your situation rises to that level is a fact-specific question, and Scott Scherr can review the insurer’s conduct and the policy to evaluate it.
How the Proportionate Responsibility Rule Affects Your Claim
One of the most common reasons insurers deny or undervalue personal injury claims in Texas is disputed fault. Texas follows a modified comparative fault system codified in Chapter 33 of the Civil Practice & Remedies Code, and it directly affects your right to recover.
Under §33.001, a claimant whose percentage of responsibility is greater than 50 percent may not recover damages. If your share of fault is 50 percent or less, your recovery is reduced by that percentage. For example, if a jury finds you 30 percent at fault on damages of $100,000, you recover $70,000. If the jury finds you 51 percent at fault, you recover nothing, even on serious injuries.
Insurance companies in the Bryan and College Station area frequently use this rule as leverage, arguing that you bear enough fault to reduce or wipe out their exposure. Pushing back requires evidence: photographs, witness statements, accident reconstruction, expert testimony, and a careful presentation of how the crash actually unfolded.
Why the Two-Year Deadline Matters After a Denial
Texas imposes a two-year statute of limitations on personal injury lawsuits under Section 16.003 of the Civil Practice & Remedies Code. The clock starts on the date of the accident, not on the date the insurer denies your claim. That means time spent waiting for an insurer to reverse a denial is time burning off your right to sue.
If the deadline passes without a lawsuit on file, the case is generally barred, regardless of how strong the underlying claim was. Acting promptly preserves your evidence, keeps the insurer honest, and protects your right to file suit if negotiations fail.
Protect Your Right to Compensation in Brazos County
A denied insurance claim can feel like the end of the road, but it is often just the beginning of a more focused legal fight. Scott Scherr at The Payne Law Group is Board-Certified in Personal Injury Trial Law by the Texas Board of Legal Specialization, a credential held by less than two percent of Texas attorneys.
With more than 30 years of experience handling claims in state and federal courts, he has the resources and trial readiness to take on insurance companies that refuse to pay what they owe. Contact Scott Scherr at The Payne Law Group online or call our office to schedule a free consultation.