Law360
August 12, 2025
Virtually every insurance policy contains specific duties required of an insured in the event of loss.
Typically, an insured's duties, which may be modified by endorsement, include claim reporting or claim notice requirements, cooperating with the claim investigation, and submitting required information or documents to substantiate the loss, such as inventories, inspections and examinations under oath.
While these duties are not novel or unfamiliar in the insurance context, the consequences of failing to satisfy these duties are often not as clearly understood. In fact, in Texas, an insured's failure to satisfy certain duties is fatal to recovery, while failing to satisfy others may result in abatement rather than summary disposition. In this article, we examine which failures have led to dismissal and which have led to abatement in Texas courts.
As a threshold matter, an insured's duties are generally considered to be conditions precedent to coverage, filing suit, or both.
Recently, in RC Management Inc. v. Third Coast Insurance Co., the U.S. District Court for the Western District of Texas analyzed whether a claim notice endorsement constituted a condition precedent to coverage and, if so, whether the insurer had to establish prejudice in order to properly deny coverage based on the insured's failure to comply with the policy's specific time limit to submit a claim under Texas law.[1]
In its June 11 decision, the court noted that this precise issue had not been before the U.S. Court of Appeals for the Fifth Circuit or Texas Supreme Court but, determined that the pertinent inquiry was whether the policy's notice provision constituted an essential element of the parties' bargained-for exchange.
The court distinguished between "as soon as practicable" or "prompt notice" provisions as opposed to the insured's policy that contained an unambiguous one-year notice endorsement. Finding that the one-year notice provision was a condition precedent to coverage that the insured accepted, the court declined to alter the parties' contract to impose a prejudice requirement that was not included in the bargained-for exchange.[2]
Accordingly, although prejudice may be required in other situations, if the parties agree to a specific time period during which a claim must be reported, then a showing of prejudice is not required by the insurer. And if the claim is not reported during that period, then there simply is no coverage for the claim. Failure to submit a claim notice that complies with a set time requirement in the underlying policy can be fatal to an insured's recovery.
Similarly, on June 17, the U.S. District Court for the Northern District of Texas held in Schnatzmeyer v. State Farm Insurance Co. that when an insured does not satisfy their policy's conditions precedent of providing a personal property inventory prior to filing suit, their causes of action related to their personal property losses are barred as a matter of law.[3]
The court reasoned that such a failure to comply with this condition before filing suit prejudiced the insurer by preventing it from being able to timely adjust the insureds' personal property loss.[4] The failure to comply with this condition was again fatal to the insured's claims.
Likewise, last August, the U.S. District Court for the Southern District of Texas determined in Ansah v. Nationwide Property & Casualty Insurance Co. that insurers do not have a duty to provide coverage if the insured fails to cooperate in the insurers' claim investigation or fails to show the insurer the damaged property, prejudicing the insurer's investigation.[5]
The Ansah insureds had disposed of their damaged personal property before appraisal and only provided a list of damaged items after litigation commenced. The insureds' failure to present the damaged property prejudiced the insurer by limiting its ability to assess the insureds' personal property valuation via appraisal.[6]
The court held that the insureds' failures prejudiced the insurer's appraisal rights, and consequently, that the insurer had no coverage obligation under the policy for the damaged personal property.[7] Thus, failing to provide an inventory or opportunity to inspect the claimed damage or otherwise failing to cooperate with the claim investigation can also be fatal to an insured's recovery, especially when those failures prejudice an insurer's ability to investigate the claim.
When the concurrent causation doctrine applies, failing to provide evidence that allows the fact-finder to segregate damage resulting from covered and noncovered perils can be fatal to an insured's recovery.
While not necessarily a specific policy duty, the U.S. District Court for the Southern District of Texas concluded in its June 30 decision in Hale v. State Farm Lloyds that when an insured fails to provide evidence refuting an insurer's contentions that the claimed storm damage also included damage caused by or resulting from excluded perils such as manufacturing or age-related defects, such contention was undisputed and was fatal to an insured's claims.[8]
In situations where the concurrent causation doctrine applied, an insured is required to produce some evidence to segregate the covered damage from noncovered damage. Instead of providing such segregation evidence, in Hale the insured simply asserted that a hail event damaged his property on a specific date and only cited his contractor's estimate for a total roof replacement in support.
The court concluded that the insured offered no reliable evidence with which a jury could attempt to segregate the loss attributable to any covered damage from the loss attributable to excluded perils, and held that this failure to segregate damage resulting from covered and noncovered perils barred the insured's recovery.
On the topic of appraisal, some Texas courts have held that an insured must fulfill all of its obligations under its policy prior to attempting to compel an insurer to appraisal. For example, the U.S. District Court for the Northern District of Texas determined in Wright v. State Farm Lloyds that the insured bore a burden of establishing full compliance with all conditions precedent under the policy before the insured could compel appraisal.[9]
However, the court found, in its March 25 decision, that the insured offered no evidence that he performed all conditions precedent to appraisal.[10] The resultant holding was expected — the court concluded that although appraisal is appropriate to set the amount of loss even when coverage is disputed, the underlying policy provisions requiring the insured to perform certain duties following a loss constituted a condition precedent to his right to compel appraisal, and an insured's failure to do so precluded its ability to compel appraisal.[11]
In comparison, in 2012, the U.S. District Court for the Southern District of Texas encountered a situation in Brown v. State Farm Lloyds in which the insured admitted he did not provide requested documentation and did not submit to an examination under oath before filing suit as required by the policy.[12]
Despite these admissions, the insured sought abatement of his suit, arguing that summary disposition was inappropriate because his insurer allegedly declined to respond to his communications and attempted to prevent him from satisfying his obligations under the policy.[13]
As an initial inquiry, the court found that policy provisions requiring that an insured submit to an examination under oath are valid under Texas law, constituting a condition precedent to sustaining a suit on the policy.[14] Appearing to agree with Ansah, the court continued that an insurer may appropriately enforce conditions precedent to coverage where the underlying policy contains unambiguous language requiring an insured to submit requested documentation.[15]
However, the court rejected the insurer's motion for summary judgment without prejudice, holding that the insured's failure to satisfy a condition precedent requiring the insured to submit to an examination under oath resulted in abatement of the case rather than dismissal.[16]
Thus, an insured's failure to submit to an examination under oath may not necessarily be fatal to recovery — unlike the duties reviewed above — and may result in abatement rather than fatality of the suit.
Conclusion
In conclusion, an insured's duties under its policy often constitute conditions precedent to coverage, filing suit, or both.
Regarding claim notice or claim submission requirements, an insured's failure to submit a claim that complies with a condition requiring the claim be submitted in a time certain can be fatal to an insured's recovery.
Likewise, with respect to required claim documentation, insureds' failures to comply with their duties under their policies to provide insurers with an inventory may prejudice an insurer's investigation as a matter of law by limiting its ability to assess the claimed damage, proving again fatal to an insured's recovery.
Conditions precedent to invoking appraisal may be either fatal or abatable. Texas courts have both permitted an insured to cure certain failures, while others may result in flat denial of an insured's appraisal demand.
It can be gleaned from a review of Texas law that an insured's failure to satisfy the following duties under the policy can be fatal to recovery in Texas: timely and compliant claim submission and production of requested loss documentation.
In addition, an insured's failure to segregate damages can also be fatal to recovery when the concurrent causation doctrine applies, and an insured's failure to satisfy the duties under the policy can also preclude an insured's ability to compel appraisal.
Yet, the appropriate remedy for an insured's failure to submit to an examination under oath may be abatement of the case — not summary disposition — wherein failing to meet these specific provisions — as opposed to claim reporting, providing requested documentation, and segregating covered damage — is not immediately fatal to recovery.
Notably, the distinction between the duties that can be fatal to recovery and those that are abatable appear to be that the duties that are abatable are abated so that the insured may cure the failure during the abatement period whereas the duties that are fatal are those that can no longer be cured.
_________________________________
[1] RC MGMT., Inc. v. Third Coast Ins. Co., No. SA-24-CV-00711-XR, 2025 WL 1699951, at *4 (W.D. Tex. June 11, 2025).
[2] Id. (granting insurer's motion for summary judgment on the insured's breach of contract claim).
[3] Schnatzmeyer, et al. v. State Farm Ins. Co., No. 3:23-CV-02820-K, 2025 WL 1697505, at *8 (N.D. Tex. June 17, 2025).
[4] Id. at *7 (granting insurer's motion for summary judgment in part as to insureds' personal property claim).
[5] Ansah v. Nationwide Prop. & Cas. Ins. Co., No. H-23-2488, 2024 WL 3929895, at *3 (S.D. Tex. Aug. 23, 2024).
[6] Id. at *4.
[7] Id. (granting insurer's motion for summary judgment on the insured's breach of contract claim).
[8] Hale v. State Farm Lloyds, No. 3:24-cv-00166, 2025 U.S. Dist. LEXIS 123492 (S.D. Tex. June 30, 2025).
[9] Wright v. State Farm Lloyds, No. 4:23-CV-01248-O, 2024 WL 1587057, at *4 (N.D. Tex. Mar. 25, 2024).
[10] Id. at *5.
[11] Id. (denying insured's motion to compel appraisal and abatement).
[12] Brown v. State Farm Lloyds, No. V-10-63, 2012 WL 1077668, at *2 (S.D. Tex. Mar. 29, 2012).
[13] Id.
[14] Id. at *3 (quoting In re Cypress Texas Lloyds, No. 13-11-00107-CV, 2011 WL 3631970, at *9 (Tex. App.—Corpus Christi Aug. 15, 2011)) (citations omitted).
[15] Id. (quoting Rossco Holdings, Inc. v. Lexington Ins. Co., No. H-09-CV-04047, 2011 WL 1363799 (S.D. Tex. Apr. 11, 2011)) (citations omitted).
[16] Id. at *3 (quoting In re Cypress Texas Lloyds, No. 13-11-00107-CV, 2011 WL 3631970, at *9 (Tex. App.—Corpus Christi Aug. 15, 2011)).
