How Fast Texas Insurers Must Handle a Claim

Fact-checked against primary sources October 3, 2026

A Texas insurer handling a claim from an insured, policyholder or named beneficiary has 15 days from notice to acknowledge the claim and start investigating, 15 business days from receiving everything it needs to secure final proof of loss to accept or reject it, and five business days from telling the claimant it will pay to send the money. Those deadlines, and the interest and attorney's fees owed when an insurer misses them if the insurer is liable for the claim, come from Subchapter B of Chapter 542 of the Insurance Code, titled "Prompt Payment of Claims."

Which claims the deadlines cover

The subchapter applies only to first-party claims. Section 542.051(2) defines a "claim" as a first-party claim that is made by an insured or policyholder under an insurance policy or contract, or by a beneficiary named in it, and that "must be paid by the insurer directly to the insured or beneficiary."

In plain terms, that is a claim on a policy you hold or are named as a beneficiary in, paid to you by that policy's insurer. The uninsured and underinsured motorist coverage in your own auto policy is one kind of coverage you hold yourself. A claim against the at-fault driver's liability insurer is a different thing. That insurer pays because of its own policyholder's liability, not under a policy you hold, so the definition does not reach it. The steps in a claim against the other driver are covered in the guide to how a car accident claim works.

Section 542.052 lists the insurers covered, from stock and mutual companies to Lloyd's plans, reciprocal exchanges, county mutuals, risk retention groups and eligible surplus lines insurers. Section 542.053 excludes workers' compensation insurance, mortgage guaranty insurance, title insurance, fidelity, surety and guaranty bonds, marine insurance as defined by Section 1807.001, and guaranty associations created under Chapter 2602. It also does not apply to a health maintenance organization except as Section 1271.005(c) provides, or to a claim governed by Subchapter C of Chapter 1301.

Two definitions that start the clocks

Section 542.051 defines the terms the deadlines depend on. A "business day" is "a day other than a Saturday, Sunday, or holiday recognized by this state." A "notice of claim" is "any written notification provided by a claimant to an insurer that reasonably apprises the insurer of the facts relating to the claim." Some deadlines below count every day and others count only business days, so the wording in each row matters.

The timeline, quoted from the statute

Each deadline below is quoted exactly from the section listed. Notice the different starting points: the first runs from notice of the claim, the second from receipt of everything the insurer needs, and the third from the insurer's own decision.

Stage	What the insurer must do	Deadline as the statute words it	Section
Acknowledge and investigate	Acknowledge receipt of the claim, commence any investigation, and request all items, statements and forms it reasonably believes it will need	"Not later than the 15th day or, if the insurer is an eligible surplus lines insurer, the 30th business day after the date an insurer receives notice of a claim"	542.055(a)
Accept or reject	Notify the claimant in writing of acceptance or rejection	"not later than the 15th business day after the date the insurer receives all items, statements, and forms required by the insurer to secure final proof of loss"	542.056(a)
Accept or reject, suspected arson	Same written notice, where the insurer has a reasonable basis to believe the loss resulted from arson	"not later than the 30th day after the date the insurer receives all items, statements, and forms required by the insurer"	542.056(b)
More time to decide	Within the accept-or-reject period, tell the claimant why more time is needed; then decide	"The insurer shall accept or reject the claim not later than the 45th day after the date the insurer notifies a claimant under this subsection."	542.056(d)
Pay	Pay the claim, or the part it has agreed to pay	"not later than the fifth business day after the date notice is made"	542.057(a)
Pay, conditional	Pay where payment depends on an act by the claimant	"not later than the fifth business day after the date the act is performed"	542.057(b)
Pay, surplus lines	Pay, if the insurer is an eligible surplus lines insurer	"not later than the 20th business day after the notice or the date the act is performed, as applicable"	542.057(c)
Delay	Owes the section 542.060 damages if payment is delayed after it has all items reasonably requested and required	"for a period exceeding the period specified by other applicable statutes or, if other statutes do not specify a period, for more than 60 days"	542.058(a)

Details inside each step

Acknowledgment. The first request for information is not the last. Section 542.055(b) lets the insurer make additional requests "if during the investigation of the claim the additional requests are necessary." If the acknowledgment is not in writing, the insurer must keep a record of its date, manner and content (542.055(c)).

Rejection. A rejection notice "must state the reasons for the rejection" (section 542.056(c)).

Delay. The delay rule in section 542.058(a) does not apply where arbitration or litigation finds that the claim is invalid and should not be paid (542.058(b)). Life insurers have a separate rule when they receive notice of an adverse, bona fide claim to the policy proceeds: they must pay or file an interpleader action and tender the benefits into the court's registry "not later than the 90th day" after receiving the items they requested (542.058(c)).

When the deadlines are extended

Section 542.059 provides two extensions. After "a weather-related catastrophe or major natural disaster, as defined by the commissioner," the claim-handling deadlines "are extended for an additional 15 days." And a court may extend the periods for a guaranty association on a showing of good cause and after reasonable notice to policyholders. The 45-day extension an insurer can take by giving notice under section 542.056(d) is a third route, described in the table above.

What the statute provides when an insurer misses a deadline

The remedy is in section 542.060(a). If an insurer that is liable for a claim under a policy is not in compliance with the subchapter, it owes the policyholder or the beneficiary making the claim, "in addition to the amount of the claim, interest on the amount of the claim at the rate of 18 percent a year as damages, together with reasonable and necessary attorney's fees." The same subsection keeps prejudgment interest available as provided by law. If a suit is filed, the attorney's fees "shall be taxed as part of the costs in the case" (542.060(b)).

Three qualifications sit next to that rule:

Actions under Chapter 542A. Where Chapter 542A applies, section 542.060(c) replaces the 18 percent figure, payable to "the holder of the policy," with simple interest at the rate set under Finance Code section 304.003 on the date of judgment plus five percent, accruing from the date the claim was required to be paid. Chapter 542A has its own rules, which this guide does not cover.
Guaranty associations. A guaranty association operating under Chapter 462 or 463 is not subject to the section 542.060 damages (542.053(b)).
An insurer that is liable. The remedy is written for an insurer "that is liable for a claim under an insurance policy" and is not in compliance with the subchapter.

Two more sections frame how the subchapter is read. Section 542.054 says it "shall be liberally construed to promote the prompt payment of insurance claims." Section 542.061 says its remedies are "in addition to any other remedy or procedure provided by law or at common law."

Where this fits in a larger claim

These insurer deadlines are separate from the time limit for filing a lawsuit, which the deadline to sue guide explains. They also sit alongside the fault rules in the shared fault guide, which decide how much is recoverable from another person in a tort case. For the full path from an accident to a settlement, start at the injury and accident settlements hub. DRS North Texas publishes these pages as general information drawn from the statutes themselves.