Texas-Specific · Insurance Term
Texas Prompt Payment of Claims Act (Texas Insurance Code Chapter 542)
Definition
The Texas Prompt Payment of Claims Act (Insurance Code Chapter 542, Subchapter B) sets deadlines for insurers to acknowledge, decide and pay claims. If an insurer misses them on a claim it owes, it can be liable for interest and attorney's fees on top of the claim.
In Plain English
The main deadlines: within 15 days of notice, the insurer must acknowledge the claim, begin investigating and request what it needs (§542.055). It must accept or reject within 15 business days after receiving all items, or 30 days if arson is suspected, with a 45-day extension if it gives notice (§542.056).
Once it accepts, the insurer must pay within 5 business days (§542.057). After a declared weather catastrophe, the deadlines get 15 extra days (§542.059). Surplus lines insurers have longer periods.
The clock depends on the insurer receiving what it asked for, so respond to document requests quickly. A proof of loss or other requested items can affect when deadlines start.
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Example
Hypothetical: a pipe bursts in an office building and the owner reports the claim on day 1. The insurer should acknowledge and request documents by about day 15. If the owner sends everything on day 30, a decision is generally due within 15 business days after that.
Why It Matters for Texas Property Owners
These deadlines are Texas law. Weather-related suits also require pre-suit notice under Chapter 542A, which can affect interest and fee recovery. TWIA claims follow a separate process under Chapter 2210.
What to Watch For
- Keep a dated log of when you reported the claim and sent each document.
- Answer document requests in writing and keep copies.
- Ask the insurer in writing for a status update if a deadline passes.
- Talk to an attorney about remedies if deadlines are missed on a large claim.
Sources
- Texas Insurance Code §542.055 (acknowledge and investigate)
- Texas Insurance Code §542.056 (accept or reject)
- Texas Insurance Code §542.057 (payment)
- Texas Insurance Code §542.059 (catastrophe extension)
Last updated October 14, 2026 · Primesure editorial team · How We Write