How long does an insurance company have to handle a claim in Texas?

When you file a claim under your own Texas auto policy, the insurer must acknowledge the claim, begin its investigation, and request needed documents within 15 days; accept or reject the claim in writing within 15 business days after receiving final proof of loss; and pay an accepted claim within 5 business days after its acceptance notice.

If the insurer misses these deadlines on a claim it owes, Texas law can make it pay interest on the claim amount at 18 percent per year as damages, plus your reasonable attorney's fees.

What are the deadlines?

Texas Insurance Code §§ 542.055–.058 set the timetable for a claim made under your own policy (a first-party claim):

• Within 15 days of receiving notice of the claim (§ 542.055): the insurer must acknowledge receipt, start investigating, and ask for the documents and forms it reasonably believes it will need. (Eligible surplus-lines insurers get 30 business days.)
• Within 15 business days after receiving all items needed for final proof of loss (§ 542.056): the insurer must notify you in writing that it accepts or rejects the claim. A rejection must state the reasons.
• Within 5 business days after the acceptance notice (§ 542.057): the insurer must pay the claim. If payment is conditioned on something you must do first (for example, signing a release or providing a title), the 5-business-day clock starts when you perform that act.
• No more than 60 days after it has everything (§ 542.058): if the insurer still has not paid a claim it owes by more than 60 days after receiving all reasonably requested items, the penalty statute kicks in. An exception applies where arbitration or litigation finds the claim was invalid.

What are the exceptions to the 15-business-day deadline?

Three statutory extensions exist:

1. Need for more time (§ 542.056(d)). If the insurer cannot decide within 15 business days, it must tell you in writing within that same period why it needs more time — and then accept or reject no later than the 45th day after that notice.
2. Arson investigations (§ 542.056(b)). When the insurer has a reasonable basis to believe the loss resulted from arson, it has 30 days (not 15 business days) after receiving final proof of loss to accept or reject.
3. Weather-related catastrophes (§ 542.059(b)). After a weather-related catastrophe or major natural disaster, the claim-handling deadlines are extended by an additional 15 days.

The deadlines are also tolled while the insurer is waiting on documents it reasonably requested from you — so respond to document requests promptly and in writing.

What happens if the insurer misses the deadlines?

Under § 542.060, an insurer that is liable for a claim under the policy but does not comply with the prompt-payment deadlines must pay, in addition to the claim amount, interest on the claim amount at 18 percent per year as damages, plus reasonable and necessary attorney's fees. If a lawsuit is filed, the attorney's fees are taxed as part of the costs.

You do not need a separate breach-of-contract claim to pursue these damages. As the Texas Supreme Court explained in Lamar Homes, the prompt-payment statute applies to claims personal to the insured, and penalties can apply whenever the insurer wrongfully delays payment of a benefit it owes.

A genuine coverage dispute is not a blanket excuse. A bona fide dispute over coverage defeats a common-law bad-faith claim (Stoker), but the 18 percent prompt-payment damages attach whenever the insurer is ultimately found liable under the policy — "even if the insurer had a reasonable basis for denying coverage" (Higginbotham; St. Paul Reinsurance v. Greenberg).

Do these deadlines apply to the at-fault driver's insurance company?

No — and this is the point most people get wrong.

The prompt-payment deadlines run on a claim under an insurance policy, and § 542.060 says the 18 percent damages are owed to the holder of the policy or the beneficiary making the claim under the policy. As the Texas Supreme Court put it in Lamar Homes, the statute governs claims personal to the insured — first-party claims.

If you are pursuing a third-party claim against the at-fault driver's insurer (repairs, diminished value, loss of use, or a total-loss payment), that insurer is not your insurer and owes you no Chapter 542 deadline or 18 percent penalty directly. Your tools there are documentation, liability proof, the at-fault driver's own exposure, and suit — covered in the companion page on what to do when the at-fault insurer won't respond.

The deadlines do apply to your own coverages: collision, comprehensive, UM/UIM (including first-party diminished value under UM/UIM), and rental-reimbursement.

A practical example

Suppose your own insurer receives everything for your UM/UIM property-damage claim on October 1. It must accept or reject in writing by roughly October 22 (15 business days, skipping weekends and holidays). If it accepts on October 20, payment must arrive by about October 27 (5 business days). If it instead needs more time, it must say so in writing by October 22, with reasons — and then decide by December 6. If the claim is valid and the insurer still has not paid 60 days after October 1, the 18 percent clock under § 542.060 is running.

Evidence checklist

Build the timeline before you argue about the number:

• the date you first reported the claim (note number, adjuster name, and how you reported it);
• the insurer's acknowledgment and every document request it sent;
• every item you submitted, with the date sent (keep copies — estimate, photos, proof of ownership, receipts);
• the insurer's written acceptance, partial payment, or rejection letter with its stated reasons;
• the date and amount of any payment; and
• your own contemporaneous notes of every call, delay, and promise.

When a lawyer may help

Consider legal help when the insurer blows the deadlines and then blames you, denies without stating reasons, asks for the same documents repeatedly, stalls while rental and storage costs pile up, or underpays a UM/UIM or collision claim and dares you to fight. The 18 percent penalty often changes the math — and the conversation.

Talk with Gavit Law about a delayed Texas insurance claim

Gavit Law, PLLC handles Texas auto property-damage disputes involving delayed or denied claims, UM/UIM disputes, diminished value, total-loss valuation, and related insurance issues.

Gavit Law, PLLC (210) 564-7599 <gavit@gavitlaw.com data-preserve-html-node="true">

Authorities reviewed

• Tex. Ins. Code §§ 542.055 (receipt of notice of claim), 542.056 (notice of acceptance or rejection), 542.057 (payment of claim), 542.058 (delay in payment of claim), 542.059 (extension of deadlines), 542.060 (liability for violation of subchapter).
• Lamar Homes, Inc. v. Mid-Continent Cas. Co., 242 S.W.3d 1 (Tex. 2007).
• Hinojos v. State Farm Lloyds, 619 S.W.3d 651 (Tex. 2021).
• Higginbotham v. State Farm Mut. Auto. Ins. Co., 103 F.3d 456 (5th Cir. 1997).
• St. Paul Reinsurance Co. v. Greenberg, 134 F.3d 1250 (5th Cir. 1998).
• Republic Ins. Co. v. Stoker, 903 S.W.2d 338 (Tex. 1995).

This page provides general information about Texas law and is not legal advice for any particular claim.