Texas Insurance Code § 542.058 – Penalties for Unreasonable Delay in Paying Claims
Table of Contents
Statutory Text:
Sec. 542.058. DELAY IN PAYMENT OF CLAIM.
(a) Except as otherwise provided by this subchapter, if an insurer, after receiving all items, statements, and forms reasonably requested and required under Section 542.055, delays payment of the claim for more than 60 days, the insurer shall pay damages and other items as provided by Section 542.060.
(b) If it is determined in a lawsuit that a claim received by an insurer includes a valid and reasonable explanation for the insurer’s failure to pay the claim or a part of the claim, the insurer is not liable under this section.
What Does This Law Mean for Injury Victims?
If your insurance company unreasonably delays paying your injury claim, even after receiving everything they need Texas law imposes automatic penalties, including:
Interest on the amount owed
Attorney’s fees
Possible additional damages under § 542.060
This protects personal injury victims from being worn down by delay tactics. It is especially relevant for:
Uninsured/underinsured motorist (UIM) claims
PIP and MedPay claims
First-party property damage claims
Example Scenario
You submit a complete UIM claim with your medical records, bills, and accident report. Your insurer confirms receipt, but no decision or payment is made for over 60 days. They give no explanation. Under § 542.058, you are entitled to penalties and interest, and may be able to sue for bad faith and attorney’s fees.
When This Law Applies
This law applies when:
Your insurance company has received all documentation they asked for
60 days have passed without payment
The insurer has no valid reason for the delay
It does not apply if the insurer provides a reasonable explanation, but “reasonable” is a fact-specific legal question that courts review critically.
Related Statutes
§ 542.056 – 15-Day Deadline to Respond to a Claim
§ 542.060 – Penalties and Interest for Delay
§ 542.003 – Unfair Settlement Practices
§ 541.060 – Bad Faith Insurance Conduct
§ 1952.101 – UIM Claim Process and Obligations
Texas Case Law Interpreting § 542.058
Held that failure to pay within 60 days, without sufficient cause, triggered statutory penalties.
Confirmed that unexplained delays can be penalized under § 542.058.
Stated that penalties are mandatory when deadlines are violated without justification.
Frequently Asked Questions About § 542.058
Houston Personal Injury Lawyer - Joel A. Gordon
They must pay penalties and interest under Texas law and may face a bad faith claim if the delay was unjustified.
Yes. It applies to first-party coverage claims including UIM, PIP, MedPay, and property damage.
They must provide a valid, timely reason. Vague or open-ended excuses do not always qualify as “reasonable explanations.”
Yes. Under § 542.060, you may recover attorney’s fees and additional damages if the insurer fails to comply.