Texas Law Sets Strict Deadlines for Insurers and Penalties for Delays

After a car accident, medical bills and repair costs can pile up fast. Unfortunately, insurance companies don’t always move as quickly as injured victims need them to. The good news? Texas law imposes strict deadlines on insurers to acknowledge, investigate, and pay valid claims.

These deadlines are governed by the Texas Prompt Payment of Claims Act, designed to protect policyholders from unnecessary delays and unfair tactics.

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The Texas Prompt Payment of Claims Act Explained

Under Chapter 542 of the Texas Insurance Code, insurance companies must follow specific timelines once they receive a claim. These rules apply to most car accident claims, including uninsured and underinsured motorist claims.

Key Deadlines Insurers Must Follow

In general, Texas insurers must:
  • Acknowledge the claim within 15 days of receiving notice
  • Request any additional information needed within that same timeframe
  • Accept or reject the claim within 15 business days after receiving all required documentation
  • Pay the claim within 5 business days after agreeing to pay
If an insurer delays beyond these deadlines without a valid reason, they may be violating Texas law.
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What Happens If the Insurance Company Delays Payment?


When an insurer fails to pay on time, Texas law allows injured claimants to recover:


  • 18% annual interest on the delayed amount
  • Attorney’s fees
  • The full amount of benefits owed

Importantly, insurance companies cannot avoid these penalties simply by disputing the claim, invoking appraisal, or paying late.


Texas courts have repeatedly made clear that delayed payment even after appraisal can still trigger penalties under Chapter 542.

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Do Insurers Have the Right to Investigate or Dispute Claims?


Yes. Texas law does not eliminate an insurer’s right to:


  • Investigate liability
  • Evaluate damages
  • Dispute questionable claims

However, they must still act within the statutory deadlines. Delays caused by prolonged investigations, repeated document requests, or stalling tactics may still violate the Prompt Payment Act.

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Why These Deadlines Matter for Accident Victims


Insurance delays can create serious financial pressure—especially when you’re dealing with:


  • Medical treatment
  • Missed work
  • Vehicle repairs or replacement

Knowing that insurers face real penalties for delay gives injured Texans leverage—and a legal path forward when payments stall.

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When to Talk to a Lawyer


If your insurance claim has been pending for weeks or months with no clear explanation, an attorney can help determine:


  • Whether the insurer violated Texas payment deadlines
  • Whether you may be entitled to statutory interest and attorney’s fees
  • How to pressure the insurer into timely payment

If an insurance company is delaying payment on your Texas car accident claim, Wyde & Associates can review your case and protect your rights under the Texas Insurance Code.


We’ll evaluate whether the insurer complied with the Prompt Payment of Claims Act and help you pursue the compensation you’re owed.


Contact Wyde & Associates today and hold the insurance company accountable.

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