At a glance
Legal framework
Both. Common-law duty of good faith and fair dealing (Arnold, 1987), plus Insurance Code Ch. 541 (unfair settlement practices), Ch. 542 Subch. B (prompt payment) and Ch. 542A (weather-related property claims).
Can you sue directly?
Yes, under both Ch. 541 (§ 541.151) and Ch. 542 (§ 542.060), alongside the common-law claim.
Deadline
2 years for Ch. 541 claims and common-law bad faith; 4 years for breach of the policy. Ch. 541 adds 180 days where the insurer induced the delay.
Before you file
Yes — and this one bites. A written notice letter must go to the insurer 61 days before filing, setting out the complaint, the specific amount claimed, and attorney's fees. Skip it on a Ch. 542A weather claim and the court may refuse to award any fees incurred after the insurer objects.
What you can recover

Damages available in Texas

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How to find one yourself, free

Texas is unusual: it board-certifies attorneys in Insurance Law specifically, so you can verify the specialism rather than take a website's word for it.

Before you sue

How often does your insurer actually pay?

Worth checking before you spend money on a lawyer. Two different measures exist, and they are not interchangeable — one is a real payment record, the other is a complaint count.

Health cover — real denial rates

Published, per insurer

Health insurers selling on the federal marketplace must report how many claims they received and how many they refused. The figures are public and free to inspect.

20%
Average denied, 2023
1%–54%
Range across 175 insurers

The spread is the point. Two insurers selling comparable cover in the same state can refuse wildly different shares of what they are billed for. Look your own up before you assume your refusal was routine.

Source: CMS Transparency in Coverage public use files, plan year 2023 experience. Self-reported by insurers and not audited. Covers federal-marketplace plans only — not employer cover, and not state-run marketplaces. Post-service claims only.

Home, auto & property

No payout rate is published

There is no free public figure showing what share of home or auto claims any named insurer pays. Insurers do report it to regulators, but in most states that filing is confidential. Any table you see online quoting payout percentages for property insurers is either a paid commercial product or an estimate.

What is public is the complaint index — how many confirmed complaints a company generates against its share of the market. 1.00 is average. 3.00 means three times the complaints its size would predict.

Complaint indexes are published by state insurance departments and compiled by the NAIC. Figures move with both the company’s complaints and the wider market’s.

These two numbers are not the same thing. A denial rate is the share of claims an insurer refused. A complaint index is how often customers complained relative to the company’s size. A low complaint index does not mean an insurer pays well, and a high one does not prove it refuses claims — it can reflect the kind of cover it sells or the customers it attracts. Neither figure says anything about whether your claim should have been paid.
The clock

What the insurer is required to do, and by when

Acknowledge the claim and begin investigating within 15 days; accept or reject within 15 business days of receiving everything requested; pay within 5 business days of acceptance. Past 60 days, the insurer is in breach.

The thing most people miss

Under § 542A.006 an insurer can formally accept responsibility for its own adjuster — and the court must then dismiss the adjuster from the case. It is routinely used to remove the one local defendant and move the case into federal court.

Unsettled: The limitation period for a standalone Chapter 542 prompt-payment claim is unsettled — Texas courts have applied both 2 and 4 years.
Free first step

Complain to the regulator before you spend anything

A complaint to the Texas Department of Insurance costs nothing, creates a written record, and sometimes moves a stalled claim on its own. It is not a substitute for legal advice and it does not pause any deadline — but there is rarely a reason not to do it first.

Where this comes from

Sources

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