Insurance attorneys need to be know this 2021, opinion from the Texas Supreme Court. It is styled, Louis Hinojos v. State Farm Lloyds and Paul Pulido.
The Texas Prompt Payment of Claims Act, codified in Insurance Code Chapter 542, imposes deadlines on insurers to pay valid claims. If an insurer fails to comply with Chapter 542, then it is liable for statutory interest on the amount of the claim and attorney’s fees. The insurer in this case accepted a homeowner’s claim and paid part of it before the statutory deadline.
Dissatisfied with that amount, the homeowner sued, seeking full payment of the claim plus interest and attorney’s fees under Chapter 542. While suit was pending—and after the statutory deadline for payment had passed—the insurer invoked the policy’s appraisal process. The appraisers awarded the homeowner substantially more than the amount the insurer had paid.