Insurance Litigation Attorney in Houston

Texas Insurance Litigation Law: What Policyholders Can Pursue

Texas gives policyholders meaningful legal tools when an insurer handles a claim improperly. Two statutes govern most insurance litigation in the state.

Texas Insurance Code Chapter 541

Chapter 541 prohibits unfair methods of competition and unfair or deceptive acts in claims handling, requiring insurers to represent policies honestly and adjust claims fairly and promptly. A knowing violation can result in treble damages, tripling the actual damages the insurer owes.

Texas Prompt Payment of Claims Act (Chapter 542)

Chapter 542 sets firm deadlines. Under Section 542.055, an insurer must acknowledge receipt of a claim and begin its investigation within 15 days of notice. When an insurer misses those deadlines on most first-party claims, the penalty is 18% annual interest on the amount owed, plus attorney’s fees. Property claims tied to hurricanes, hail, or other forces of nature fall under Chapter 542A, where penalty interest is instead based on the judgment interest rate set by the Texas Finance Code.

Pre-Suit Notice and Common Law Claims

Before filing suit under Chapter 541, Texas law requires 60 days’ pre-suit notice to the insurer. Claims under Chapter 542A, covering property damage from hurricanes, hail, and similar events, require at least 61 days’ written notice before suit is filed. This notice gives the carrier a window to reconsider its position before litigation begins. Texas also recognizes common law bad faith claims, a doctrine the Texas Supreme Court first recognized in 1987, which runs alongside the statutory remedies.

When a Denied or Delayed Claim Becomes a Lawsuit

Most insurance disputes don’t start as litigation. A claim gets filed, the insurer investigates, and a payment follows. The path to a lawsuit typically begins when the carrier goes silent, issues a flat denial without adequate explanation, or offers a settlement well below what the damage warrants.

After major weather events like hurricanes and winter storms, delays are common and the stakes are high. Repairs can’t wait indefinitely, but insurers sometimes treat the claim calendar as optional. When a policyholder needs a decision and payment to move forward with recovery, legal action can become a way to push the process toward resolution.

Where Houston Insurance Cases Are Filed

First-party insurance disputes arising in Houston are typically filed in Harris County District Court for state-law claims. Cases removed to federal court are heard in the U.S. District Court for the Southern District of Texas, Houston Division, which has extensive experience with these disputes. As of March 2019, approximately 600 Hurricane Harvey first-party flood insurance property cases were pending in that court alone, reflecting both the volume of Houston-area claims and the courts’ familiarity with the legal issues involved.