insurance claim statute of limitations
July-27-2023

Statute of Limitations on Bad Faith Insurance Claims in Texas

When an insured individual faces unjust treatment from their insurance provider, seeking fair compensation can be a daunting process. Understanding the statute of limitations is paramount as it sets the time limit within which a claimant must take legal action. In this comprehensive guide, we’ll explore the intricacies of bad faith insurance claims, the specific time constraints imposed by Texas law, and the steps you can take to protect your rights as a policyholder.

The Statute of Limitations Explained

What Is bad faith?

Sometimes, an insurance company may work in “bad faith” when dealing with your claim, even though the Texas Insurance Code expressly prohibits such bad faith conduct, which includes:

  • Repeatedly requesting unnecessary or overly burdensome documentation or paperwork
  • Misrepresenting facts, the law, or the insurance policy related to your claim
  • Failing to promptly communicate with you about your claim
  • Undervaluing your claim
  • Stalling its investigation of your claim
  • Knowingly misrepresenting your coverage to you
  • Making payments without explaining what they’re for
  • Trying to settle for an unreasonably low amount
  • Failing to explain your appeals rights
  • Denying all or part of your claim without any explanation
  • Failing to settle your claim when liability is reasonably clear

The bad faith insurance claim statute of limitations in Texas

Unfortunately, if your insurance company is acting in bad faith, time may be running out to pursue a claim against them. While Texas typically gives a litigant four years to bring a suit for breach of contract, many insurance policies have language which supersedes this by limiting claims to two years and one day after the property damage happens. Plus, a bad faith claim under Texas law only allows two years to file suit. This two-year statute of limitations starts to run on:

  • The date the unfair method of competition or deceptive act occurred
  • The date the person discovered or should have discovered that the deceptive act occurred. See Tex. Ins. Code § 541.162 (2005)

Exceptions and extensions to the statute of limitations

Occasionally, the Texas Code may provide for an additional 180 days to file suit if you can prove the insurance provider’s conduct prevented you from filing suit within the two-year limitation.

statute of limitations insurance claim

Possible consequences for missing the statute of limitations

The consequences for missing the statute of limitations insurance claim are obvious, and they are severe. Miss the statute, be forever barred from bringing a necessary bad faith insurance claim, and be stuck with the determination of the insurance company on your claim without recourse. 

Filing a Bad Faith Insurance Claim in Texas: Steps to Take within the Statute of Limitations Period

In order to file a successful insurance claim statute of limitations bad faith insurance claim in Texas, the following best practices are recommended: 

  1. Collect all relevant documentation and evidence to support your claim.
  2. Contact your insurance company and initiate a claims process in writing.
  3. Maintain records and correspondence related to your claim throughout the process.
  4. Consider legal assistance if your claim is denied or delayed unjustly by your insurer.

Know Your Rights: Protecting Yourself Against Unfair Practices from Insurance Companies

Unfortunately, not all insurance companies deal with homeowners in good faith. If you think your insurance company is acting in bad faith, refusing to investigate your claim, failing to communicate in a timely manner, or denying your claim without explanation, this isn’t just annoying or frustrating – it may actually be a violation of the Texas Deceptive Trade Practices -Consumer Protection Act – making it illegal.

If you feel you are being subjected to bad faith conduct by your insurance company, an experienced insurance lawyer can help get your claim back on track and can help protect your rights and ensure you get the payout you deserve.

Don’t Miss Your Window of Opportunity – Contact MMA Law Firm Today

As professionals who help clients interpret insurance policies, understand their rights, and recover on their losses every day, the commercial insurance attorneys at MMA Law Firm are well positioned to assist clients with insurance in the State of Texas, including making sure that insurance claims are submitted within timeframes required by law. Contact us today for more info.