Texas Auto Claim Denied? Your Step-by-Step Appeal Playbook

Scope and what “denied” actually means in Texas

“Denied” is a catch-all label insurers use for very different outcomes. Your next move depends on the exact type of claim and the stated reason. In Texas, auto claims generally fall into two families:

• First-party claims — you are claiming under your own policy (collision/comp for your car, PIP/MedPay for medical bills regardless of fault, UM/UIM when the other driver has no or insufficient insurance, rental, towing, custom parts, etc.).
• Third-party (liability) claims — you are pursuing the other driver’s liability insurer because their insured caused the crash. Texas law does not force a third-party carrier to pay you without proof of fault and damages, so their “denial” often means “we dispute liability or damages.”

Within those families, denials usually fall into one of these buckets:

1. Coverage (no coverage in force, excluded driver, lapsed policy, business use excluded, rideshare delivery exclusions, unlisted household driver, material misrepresentation, etc.).
2. Amount of loss (the carrier accepts coverage but values your vehicle or repairs lower than you do; rental length disputes; total loss ACV disputes).
3. Liability (fault is contested or proportionate responsibility is asserted).
4. Condition precedent / cooperation (missed deadlines, refused recorded statement, skipped independent medical exam, did not provide documents, failed to appear for an examination under oath).

Texas lets you appeal internally, complain to the Texas Department of Insurance (TDI), and ultimately sue for breach of contract and, where appropriate, for unfair settlement practices. The best approach is staged: fix the record, escalate on a schedule, and track statutory timelines that force movement.

Texas claim timelines you can use to your advantage

Under the Texas Prompt Payment of Claims Act (often called PPCA, Insurance Code Chapter 542), carriers must move claims along promptly. Knowing the clock lets you push the file forward and, if necessary, claim statutory interest and attorney’s fees for late payment on covered first-party claims.

Important: PPCA timelines apply to first-party claims. They generally do not force a third-party insurer (the other driver’s carrier) to pay you by a specific date, though a clear record still helps TDI review and eventual litigation.

Build the appeal record before you argue

Before you send an appeal letter, make the file undeniable. Texas adjusters respond when you remove ambiguity and line up the policy language, facts, and damages cleanly.

Appeal pathways by denial type

Coverage denial (no coverage / exclusion / lapse)

Ask for the exact policy form number and clause used. Compare against your declarations and endorsements. In Texas, ambiguous policy language is interpreted in favor of the insured, but you must preserve the argument in writing. Steps:

1. Write a targeted rebuttal that quotes the policy’s grant of coverage first, then the carrier’s cited exclusion. Explain why the exclusion does not apply (e.g., you were not engaged in delivery; the driver is a permissive user; the car was not used for livery; the alleged misrepresentation is immaterial).
2. Provide contrary facts (app OFF screenshots, timecards, witness statements). Ask the carrier to reopen or issue a revised position letter.
3. If the issue is PIP/MedPay or UM/UIM, highlight Texas statutory mandates (policies must offer these coverages; waivers/rejections must follow form requirements). If you purchased the coverage, denial should rest on narrow grounds; push for specifics.

Amount-of-loss dispute (repairs, total loss, rental)

Many Texas auto policies include an appraisal clause for amount of loss disputes (not coverage). Appraisal is a fast, contract-based way to set the dollar amount via independent appraisers and an umpire. Consider invoking it when the only dispute is how much, not whether, the claim is covered.

• Repairs: Submit an OEM-procedure estimate from a certified shop and demand equal-quality parts and operations. If the insurer insists on lower operations or used/aftermarket parts against OEM safety procedures, cite the procedures and ask for a written safety variance justification.
• Total loss: Request the valuation report (comps and adjustments). Attack bad comps (salvage titles, different trims, miles, options). Provide superior comps and a dealer letter for scarce models. Ask for sales tax, title/registration fees, and betterment justification in writing.
• Rental/time-to-repair: Rental or loss-of-use duration should match a reasonable repair path. Provide the shop’s scheduling email and parts backorder notices to extend rental within policy limits.

Liability denial (third-party claim)

When the other driver’s insurer denies, build a liability packet:

1. Rules of the road cited to facts: lane discipline, failure to yield, following distance, red-light statute, etc.
2. Diagram + photos showing impact angles, point of rest, and debris field. A short annotated PDF persuades supervisors.
3. Witness statements and any traffic camera/dashcam. Make open records requests to the city for intersection footage promptly.
4. Proportionate responsibility: in Texas, your recovery is reduced by your percentage of fault; if you are more than 50% at fault you recover nothing from the other driver. A balanced presentation that concedes minor mistakes but shows the other driver’s primary fault often unlocks a compromise.

Always run a parallel claim under your own collision (if purchased). Your carrier can repair your car now and then subrogate against the at-fault carrier; you recover your deductible when subrogation succeeds.

Write a Texas-style appeal letter that gets read

Keep it factual and cite the statute/policy without threats. A calm, organized letter moves files faster than a long narrative.

Claim: [number]  Loss: [date]  Insured: [name]  Vehicle: [VIN]
Dear Adjuster [name]:

Thank you for your [date] letter denying my claim based on [policy form/paragraph]. 
Please accept this appeal and request for reconsideration.

1) Coverage: The policy grants [collision/UM/PIP] coverage at Declarations page [page]. 
   The cited exclusion [quote] does not apply because [fact + exhibit]. 
   See exhibits A–D (app OFF screenshot with time stamp; witness statement; VIN decode).

2) Amount of loss: The OEM repair procedures (Exhibit E) require [operations/parts]. 
   My certified shop estimate totals $[amount]. Please advise if you will issue payment. 
   If not, consider this a demand for appraisal under the policy appraisal clause.

3) Prompt payment timelines: All requested items were submitted on [date]. 
   Under Tex. Ins. Code ch. 542.056, the claim decision was due by [date]. 
   Please advise in writing within 5 business days whether the claim is accepted and payment issued.

Absent resolution by [date], I will elevate to your supervisor and TDI with this packet.
Respectfully,
[Your name]  [phone/email]
    

Escalate: supervisor, TDI complaint, and pre-suit positioning

Supervisor escalation

• Ask, in writing, for the supervisor’s name and email. Send a two-page summary with exhibits and a clean timeline.
• Request a written position letter quoting each policy provision relied on and explaining how your evidence fails to satisfy it.

Texas Department of Insurance (TDI) complaint

If the carrier stonewalls or issues inconsistent reasons, file a TDI complaint online. Attach your denial letter, appeal letter, evidence list, and a timeline keyed to PPCA dates. TDI will forward your complaint to the insurer, which must respond to TDI—this often triggers fresh eyes on the file. TDI cannot order payment, but its oversight frequently leads to movement or a clearer written record for court.

Pre-suit notices and limitation periods

• Breach of contract (first-party): generally a four-year statute of limitations in Texas; check your policy for any shorter contractual suit limit and diary it.
• Unfair settlement practices / Insurance Code Chapter 541 and DTPA: typically a two-year limitations period from when the violation occurred or was discovered. These claims require a 60-day pre-suit notice with specific details and a settlement demand.
• PPCA (Chapter 542) interest claim attaches to covered first-party benefits paid late; keep a ledger of dates and amounts to calculate statutory interest.
• Small claims (Justice Court) can hear money claims up to $20,000 in controversy; for larger disputes or injury cases, County/District Court is appropriate.

If you intend to sue your own carrier for UM/UIM benefits, be ready to prove the uninsured driver’s fault and your damages; many disputes turn on evidence sufficiency, not just policy language. A Texas attorney can package the case and handle pre-suit requirements.

Special issues that frequently derail Texas auto appeals

• Recorded statements without preparation — answer accurately but briefly; stick to facts you know. Follow up by correcting any transcription mistakes in writing.
• Examination Under Oath (EUO) — cooperate, but request the policy clause that authorizes the EUO and ask to schedule with time to gather records. Bring your evidence folder.
• Aftermarket/used parts on a new car — cite OEM procedures and warranty implications. Ask for a written safety rationale if the insurer insists on non-OEM structural parts.
• Failure to mitigate — insurers may reduce rental days if you delay authorizing repairs. Document shop backlogs and parts delays; send the emails to your adjuster in real time.
• Gaps in medical treatment — for PIP/MedPay or injury claims, gaps suggest lack of causation. Keep appointments and keep a treatment log.

Data view: typical Texas auto claim flow

Putting it together: a 14-day appeal plan

1. Day 1: Read the denial letter. Start a one-page timeline. Request (in writing) the policy forms and each clause relied on; ask for the complete list of requested items, if any are still pending.
2. Day 2–4: Assemble photos, dashcam, police report, medical and repair proofs. Obtain an OEM-procedure estimate or a second valuation for total loss disputes.
3. Day 5: Send your appeal letter with exhibits and a PPCA timeline. Ask for a supervisor review and a written position letter in seven business days.
4. Day 8–10: If the dispute is only dollar amount, invoke the appraisal clause. Name your appraiser and request the insurer’s choice.
5. Day 11–12: Prepare a TDI complaint draft with attachments. Share the draft with the adjuster and supervisor and invite resolution.
6. Day 13–14: File the TDI complaint if no progress. Calendar pre-suit notice and limitations dates. If injuries are significant or denial persists, schedule a consultation with a Texas insurance/PI attorney and bring your organized file.

Conclusion

A Texas auto claim denial is not the end of the road; it is the start of a disciplined process. Separate coverage issues from amount-of-loss and liability disputes, then aim each at the right remedy—policy appraisal for dollar fights, PPCA timelines for first-party delays, TDI oversight for stalled files, and litigation when contract rights are ignored or unfair practices appear. Keep everything in writing, quote the policy before the exclusion, and build a file that a supervisor—or a judge—can understand in five minutes. When you follow the timeline, present clean evidence, and escalate on schedule, most Texas auto denials turn into corrected decisions, negotiated fair values, or clear litigation targets.

FAQ

1) What’s the difference between a “coverage denial” and a “liability denial”?

A coverage denial says your own policy does not apply (e.g., exclusion, lapse). A liability denial is from the other driver’s insurer saying they dispute fault or damages. Coverage denials call for policy-based appeals; liability denials call for an evidence packet and, if needed, using your own collision and letting your carrier subrogate.

2) How long does a Texas insurer have to decide my first-party claim?

Under the Prompt Payment of Claims Act, the carrier must acknowledge within 15 calendar days, request needed items in that period, then accept or deny within 15 business days after you submit everything (they may extend to 45 days with a written reason). If accepted, payment is due within 5 business days.

3) Do these timelines force a third-party insurer (the other driver’s) to pay me?

No. PPCA timelines govern your own policy claims. Third-party carriers move at their own pace until liability and damages are proven. Use a clean evidence packet, consider small-claims court for modest sums, and run your own collision claim to get your car fixed sooner.

4) My only dispute is the dollar amount (repairs/ACV). What’s the fastest fix?

Most Texas auto policies have an Appraisal Clause for amount-of-loss disputes. Invoke it in writing, name your appraiser, and ask the insurer to name theirs. Appraisal sets the number; it doesn’t decide coverage or fault.

5) Can I get penalties if the insurer pays late?

For covered first-party benefits paid late, you may claim statutory interest (Texas Insurance Code Chapter 542) and attorney’s fees. Track dates carefully and keep copies of all submissions.

6) Do I have to give a recorded statement or Examination Under Oath (EUO)?

For your own policy, cooperation is a condition; you can be required to give a statement or EUO—ask for the policy clause, prepare, and keep answers factual. For a third-party claim, you generally don’t have to provide a statement to the other driver’s insurer.

7) The other driver is uninsured—how do I proceed?

File a UM/UIM claim with your carrier. You still must prove the other driver’s fault and your damages. Your insurer may require consent before you settle with the at-fault driver and may pursue subrogation afterward.

8) How do I challenge a low total-loss offer?

Request the valuation report (all comps and adjustments). Attack bad comps (wrong trim, salvage titles, miles, options, distance), supply better comps, and document options via VIN build sheet. Ask for sales tax and title/registration fees per Texas practice.

9) What can the Texas Department of Insurance (TDI) actually do?

TDI can’t order payment but will forward your complaint and require the insurer’s written response. This often prompts a fresh review or a clearer position letter you can use in appraisal or court.

10) What deadlines should I diary if the appeal fails?

Commonly: four years for breach of contract (first-party), and about two years for Insurance Code Chapter 541/DTPA claims (with a required 60-day pre-suit notice). Justice Court (small claims) handles up to $20,000. Confirm dates with a Texas attorney for your situation.

Technical basis (legal sources)

Texas statutes

• Texas Insurance Code, Chapter 542 — Prompt Payment of Claims Act (acknowledgment, decision, and payment timelines for first-party claims; remedies for late payment, §542.060).
• Texas Insurance Code, Chapter 541 — Unfair methods of competition and unfair or deceptive acts or practices (including unfair settlement practices and private civil action).
• Texas Insurance Code, §§1952.101–1952.110 — Uninsured/Underinsured Motorist (UM/UIM) coverage (offer, selection/rejection, benefits).
• Texas Insurance Code, §§1952.151–1952.161 — Personal Injury Protection (PIP) (mandatory offer; benefits; coordination).
• Texas Business & Commerce Code, Chapter 17 (DTPA) — Consumer protection remedies that may apply to unfair insurance practices (private action; pre-suit notice; damages).
• Texas Civil Practice & Remedies Code, §16.004 — Four-year limitations period for breach-of-contract (typical for first-party policy suits).
• Texas Insurance Code, §541.162 & Business & Commerce Code, §17.565 — Generally two-year limitations for Insurance Code/DTPA claims (with discovery rule provisions).
• Texas Transportation Code, Chapter 545 (Rules of the Road) & Chapter 544 (Traffic Signs/Signals) — frequently cited fault standards for third-party liability disputes.
• Texas Government Code, §27.031 & Texas Rules of Civil Procedure 500–510 — Justice Court (small-claims) jurisdiction and procedures.

Regulations & agency guidance

• 28 Texas Administrative Code §21.203 (and related subchapter) — Unfair claims settlement practices rules enforced by the Texas Department of Insurance (TDI).
• TDI Consumer materials — Auto insurance complaint process, claim handling expectations, and form letters (useful for escalations and timelines).

Policy forms & contract tools

• ISO Personal Auto Policy (PP 00 01) — baseline grant of coverage, exclusions (e.g., livery), duties after loss, appraisal clause, and first-party coverages (collision/comp, MedPay/PIP, UM/UIM). Carriers may use proprietary forms—always quote the exact page/paragraph from your policy.
• UM/UIM and PIP endorsements (Texas editions) — terms controlling medical benefits, offsets, consent-to-settle, and proof requirements.

Leading Texas cases (selected)

• State Farm Lloyds v. Johnson, 290 S.W.3d 886 (Tex. 2009) — appraisal is a contractual method to resolve amount-of-loss disputes; courts generally enforce appraisal awards absent limited exceptions.
• Brainard v. Trinity Universal Ins. Co., 216 S.W.3d 809 (Tex. 2006) — UM/UIM insurer’s obligation is conditioned on legal liability and damages being established; affects litigation posture for UM/UIM claims.
• USAA Tex. Lloyds Co. v. Menchaca, 545 S.W.3d 479 (Tex. 2017) — clarifies relationship between breach-of-contract and extra-contractual (bad-faith) claims under Texas law.
• Barbara Technologies Corp. v. State Farm Lloyds, 589 S.W.3d 806 (Tex. 2019) — appraisal payment does not automatically bar Prompt Payment (Chapter 542) interest claims (principally a property case; timing principles often cited).
• Ortiz v. State Farm Lloyds, 589 S.W.3d 127 (Tex. 2019) — limits on extra-contractual recovery when no independent injury beyond policy benefits (primarily in the property context; persuasive for auto first-party disputes).

Practical evidence references

• OEM repair procedures & position statements — establish required operations/parts for safe repairs (attach to estimates in amount-of-loss appeals).
• Police crash reports, dashcam, and scene photography protocols — support liability determinations and subrogation.
• Valuation reports & comparable sales data — required to challenge total-loss ACV (retain trim/options proof via VIN build sheets).