TPPCA or the Texas Prompt Payment of Claims Act, is a law codified in Chapter 542 of the Texas Insurance Code. Enacted in 2003, the TPPCA requires insurance companies to promptly process and pay first-party claims and handle the duty to defend in third-party claims. Its goal is to protect policyholders from delays, underpayments, and bad faith tactics by insurers.
The TPPCA is considered a “strict liability” statute, which means a policyholder does not need to prove bad faith to recover penalties. It is enough to show that the insurer was liable for the claim and failed to meet statutory deadlines. For businesses or individuals facing delayed or underpaid claims, consulting a Houston Insurance Claims Lawyer can ensure your rights are protected and deadlines are properly enforced.
Key Provisions and Deadlines
Acknowledgement and Investigation:
- Within 15 days of receiving a claim notice (30 days for surplus lines), the insurer must acknowledge receipt, begin an investigation, and request necessary information from the policyholder.
Acceptance or Rejection:
- After receiving all required information, the insurer generally has 15 business days to accept or reject the claim in writing, providing reasons if the claim is denied.
Payment:
- If a claim is accepted, the insurer must issue payment within five business days (20 for surplus lines) of notifying the policyholder.
For a free legal consultation, call (800) 941-1041
Penalties for Non-Compliance
When an insurer violates TPPCA deadlines or wrongfully denies a claim, policyholders may recover:
- 18% Annual Penalty Interest: Calculated from when payment was due until the judgment date.
- Attorney’s Fees: Reasonable fees incurred while pursuing the claim under the TPPCA.
Common Bad Faith Insurance Tactics
Even though the TPPCA does not require proof of bad faith to recover penalties, many insurers engage in unfair practices that can further harm policyholders. Common bad faith tactics include:
Claim Denial and Investigation Issues
- Denying claims without valid reasons or explanations.
- Failing to conduct a thorough investigation, or using biased investigations.
- Ignoring evidence supporting the policyholder’s claim.
- Wrongfully accusing the policyholder of fraud.
Delays and Communication Issues
- Unreasonable delays in processing claims, responding to communications, or issuing payment.
- Ignoring emails, calls, or letters.
- Requesting excessive documentation to burden the claimant.
- Repeatedly changing the assigned claim adjuster.
Settlement and Policy Misrepresentation
- Making unreasonably low settlement offers (“lowballing”).
- Misrepresenting policy language or applicable law.
- Failing to disclose all benefits owed under the policy.
- Threatening policyholders to pressure acceptance of unfair settlements.
- Advising claimants not to hire a lawyer.
If you encounter any of these tactics, it is important to act quickly and document all interactions with your insurer. Consulting a Bad Faith Insurance Lawyer in Houston can help you identify violations, enforce your rights under the TPPCA, and take action to recover the full value of your claim, including statutory penalties and attorney’s fees.
Click to contact our insurance claims lawyers today
How an Insurance Claims Lawyer Can Help
An insurance claims lawyer can enforce the TPPCA, protect your rights, and navigate appraisal disputes. Key ways a lawyer assists include:
- Ensuring Compliance and Documenting Deadlines – Ensuring all claim submissions meet TPPCA requirements and documenting insurer delays.
- Managing the Claims Process – Handling communication with the insurer to prevent bad faith tactics or unnecessary delays.
- Gathering and Presenting Evidence – Hiring experts to fully evaluate damage and losses to support the claim.
- Exposing Improper Denials or Delays – Identifying invalid reasons for denial and pursuing recovery, including statutory penalties.
- Negotiation and Litigation – Leveraging TPPCA penalties to negotiate settlements, or filing lawsuits if necessary to secure full compensation.
- Recovering Penalties and Fees – Recovering the original claim amount plus 18% annual interest and reasonable attorney’s fees.
Complete a Free Case Evaluation form now
Get Help from a Houston Insurance Claims Lawyer
The attorneys at Barcus Arenas, PLLC have extensive experience handling business insurance disputes, enforcing the Texas Prompt Payment of Claims Act (TPPCA), and addressing bad faith insurance tactics. Our team can review your claim, ensure statutory deadlines are met, and take action to recover the full amount owed, including penalties and attorney’s fees.
Contact Barcus Arenas, PLLC today to speak with a knowledgeable Houston Insurance Claims Lawyer. We provide clear guidance, strong advocacy, and support every step of the way for businesses facing delayed, denied, or underpaid insurance claims.
Call or text (800) 941-1041 or complete a Free Case Evaluation form
