What happens when a Texas insurer misses the payment deadline

Texas does not leave a late payment without a price. Chapter 542 of the Insurance Code sets a payment deadline and attaches interest and fees to missing it — but the trigger is narrow, and for property claims the rate changed in 2017.

The short answer. Under § 542.058, an insurer that delays payment beyond the applicable statutory period — or more than 60 days where no other period applies — after receiving all items it reasonably requested, owes the damages in § 542.060: interest on the claim at 18% a year plus reasonable and necessary attorney’s fees. Property claims under Chapter 542A use a different rate: simple interest at the judgment rate plus five points.

What the statute says

§ 542.058(a): Except as otherwise provided, if an insurer, after receiving all items, statements, and forms reasonably requested and required under Section 542.055, delays payment of the claim 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, the insurer shall pay damages and other items as provided by Section 542.060.

§ 542.060(a): … the insurer is liable to pay the holder of the policy or the beneficiary making the claim under the policy, 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.

§ 542.060(c): In an action to which Chapter 542A … applies … the insurer is liable to pay … simple interest on the amount of the claim as damages each year at the rate determined on the date of judgment by adding five percent to the interest rate determined under Section 304.003, Finance Code, together with reasonable and necessary attorney's fees … Interest awarded under this subsection as damages accrues beginning on the date the claim was required to be paid.

Why the 2017 change matters

Before Chapter 542A, a property claim and a liability claim were on the same 18% track. Now the 18% figure applies "[e]xcept as provided by Subsection (c)," and subsection (c) sends property damage actions covered by 542A to a floating rate: the judgment interest rate plus five points, simple, accruing from the date the claim should have been paid. If you are calculating what a delay is worth on a homeowner claim, the rate you use is probably not 18%.

What it does not settle

The clock starts on the last document, not the loss. The deadline runs after the insurer receives all items, statements and forms it reasonably requested and required. A request that is not reasonable does not restart anything.
An invalid claim carries no penalty. Under § 542.058(b), the subsection does not apply where arbitration or litigation finds the claim invalid and not payable.
Interest and fees are not the claim. The amount of the loss is decided under the policy; this chapter adds interest as damages and, in a suit, reasonable and necessary fees taxed as costs.
It is not a bad-faith cause of action by itself. Chapter 542 is a prompt-payment remedy; the broader extra-contractual claims are separate, and Chapter 542A adds its own pre-suit requirements that are worth checking with counsel.

How to use it on a claim

Ask for the request list in writing and answer it completely. The date you finish is the date the deadline runs from.
Record that date. A calendar entry with the delivery receipt is the whole case on timing.
Identify the policy type. Whether 542A applies decides which interest rate you compute.
Calculate both ways if it is close: 18% simple under (a), or judgment rate plus five under (c), each running from the date payment was required.
Keep the fee record — an award of fees depends on showing they were reasonable and necessary.

Sources

Tex. Ins. Code §§ 542.058 and 542.060, read at texas.public.law on 24 October 2026 (site states "verified May 26, 2025", sourcing the official text at statutes.capitol.texas.gov). This is a secondary reproduction; confirm against the official codified text before relying on it.

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This page summarises a statute and how it is used on a claim. It is information, not legal advice, and it does not create a lawyer-client relationship. The statutory text quoted above was read on 24 October 2026 from the source listed under Sources, and can change; verify the current version before relying on it.

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