After a Tennessee storm, fire, or burst pipe, most homeowners claims are paid without a fight. When one is not, homeowners often ask whether state law does anything about an insurer that simply sits on a claim. One answer is in Tennessee Code § 56-7-105. It says that when a loss occurs and an insurer refuses to pay it within sixty (60) days after the policyholder makes a demand, a court or jury can add a sum not exceeding 25% on the liability for the loss, on top of the loss and interest, if the refusal was not in good faith.
This article explains what the statute says in plain English. It is informational only and is not legal advice. Whether the statute applies to a specific claim is a question for a licensed Tennessee attorney.
| Item | What § 56-7-105 says |
|---|---|
| Who it applies to | Insurers doing an insurance or fidelity bonding business in Tennessee |
| Trigger | Refusal to pay a loss within sixty (60) days after the policyholder's demand |
| Maximum addition | Not exceeding 25% on the liability for the loss, plus the loss and interest |
| Required findings | Refusal was not in good faith, and the failure to pay caused additional expense, loss, or injury, including attorney fees |
| Unauthorized insurers (subsection b) | Thirty (30) days after demand; reasonable attorney fee up to 12.5% of the recovery, at least $25 |
Source: Tennessee Code § 56-7-105 (2025), as published by Justia.
The 60-day clock starts with a demand
The statute does not start counting on the day of the storm. It counts sixty days after a demand has been made by the holder of the policy. Before that point, the ordinary claim process runs: you report the loss, the adjuster inspects, and you trade estimates and documents. If you reach a point where you believe the insurer owes money and is refusing to pay it, the demand is a separate, deliberate step. How to make one properly is a question for an attorney.
Bad faith is a finding, not a label you apply
The extra amount is not automatic. The statute requires that it be “made to appear to the court or jury” that the refusal was not in good faith and that the failure to pay caused additional expense, loss, or injury, including attorney fees. That is a finding a court or jury makes, not a label either side can apply. Within the 25% cap, the court or jury measures the addition by the extra expense, loss, and injury the delay caused.
A different rule for unauthorized insurers
Subsection (b) covers actions against an unauthorized foreign or alien insurer on a policy issued or delivered in Tennessee. There, the period is thirty days after demand before the action is filed, and if the refusal was vexatious and without reasonable cause, the court may allow a reasonable attorney fee of no more than 12.5% of the recovery and no less than $25.
What Tennessee homeowners can do before it gets there
- Report the loss promptly and keep a written log of every call, email, and inspection. Step-by-step help: How to File a Home Insurance Claim in Tennessee: A Step-by-Step Guide for 2026.
- Ask for any denial or partial payment in writing, with the policy language the insurer relied on.
- If a payment looks short, read Storm Claim Underpaid in Tennessee? Your Next Steps.
- Know who is working for whom on the claim: TDCI’s glossary says public insurance adjusters in Tennessee must be licensed by the state.
- Common reasons claims are denied in Knoxville: Knoxville Homeowners Insurance Claims: 7 Reasons They Get Denied and How to Protect Yourself.
- TDCI accepts consumer complaints at no cost. How it works: How Tennesseans file an insurance complaint with TDCI’s Consumer Insurance Services.
Related reading from All Seasons
- Storm Claim Underpaid in Tennessee? Your Next Steps
- How to File a Home Insurance Claim in Tennessee: A Step-by-Step Guide for 2026
- How Tennesseans file an insurance complaint with TDCI’s Consumer Insurance Services.
- TDCI’s glossary says public insurance adjusters in Tennessee must be licensed by the state.
- Knoxville Homeowners Insurance Claims: 7 Reasons They Get Denied and How to Protect Yourself
Free policy review
All Seasons Insurance Group offers a free personal policy review. Call 865-263-1400 or visit asigtn.com/get-a-quote/. This article is informational only and does not promise coverage or eligibility; your policy forms control. Seasons change. So should your coverage.
What does Tennessee Code § 56-7-105 do?
It lets a court or jury add a sum not exceeding 25% on the liability for a loss when an insurer refuses to pay within 60 days after a demand and the refusal was not in good faith.
When does the 60-day period start?
The statute counts sixty days after a demand has been made by the holder of the policy, not from the date of the loss.
Is the 25% automatic?
No. The court or jury must find the refusal was not in good faith and that it caused additional expense, loss, or injury, including attorney fees. The 25% is a ceiling.
Who decides whether a refusal was in bad faith?
The statute turns on whether the refusal to pay was not in good faith, and a court or jury makes that finding. Whether a specific claim qualifies is a question for a licensed Tennessee attorney.
Does the law treat unauthorized insurers differently?
Yes. Subsection (b) uses thirty days after demand and allows a reasonable attorney fee up to 12.5% of the recovery, but not less than $25, if the refusal was vexatious and without reasonable cause.
What should I do first if my claim is stalled?
Ask for the insurer's position in writing, keep a log of every contact, and gather your estimates and photos. TDCI also accepts consumer complaints.
Is this legal advice?
No. This article summarizes the statute for general information. Talk to a licensed Tennessee attorney about a specific claim.
How can All Seasons help after reading this?
Call 865-263-1400 or visit asigtn.com/get-a-quote/ for a free personal policy review. Informational only; no coverage promises. Seasons change. So should your coverage.
