Relating to presuit notice and inspection requirements associated with, and certain liability in connection with, certain insurance claims for property damage.
relating to presuit notice and inspection requirements associated
with, and certain liability in connection with, certain insurance
claims for property damage.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 542.060(c), Insurance Code, is amended
to read as follows:
(c) In regard to a claim that is subject to [an action to
which] Chapter 542A [applies], if an insurer that is liable for the
[a] claim under an insurance policy is not in compliance with this
subchapter, the insurer is liable to pay the holder of the policy,
in addition to the amount of the claim, simple interest on the
amount of the claim as damages each year at the rate determined on
the date of judgment by adding five percent to the interest rate
determined under Section 304.003, Finance Code, together with
reasonable and necessary attorney’s fees. Nothing in this
subsection prevents the award of prejudgment interest on the amount
of the claim, as provided by law. Interest awarded under this
subsection as damages accrues beginning on the date the claim was
required to be paid.
SECTION 2. Section 542A.003, Insurance Code, is amended by
amending Subsections (b) and (g) and adding Subsections (b-1),
(b-2), and (b-3) to read as follows:
(b) The notice required under this section must [provide]:
(1) reference this chapter [a statement of the acts or
omissions giving rise to the claim];
(2) describe the damage to or loss of covered property
for which payment is owed under the insurance policy in sufficient
detail to give the insurer a fair opportunity to adjust the claim;
(3) state the claimant’s legal and factual basis for
believing the claim is covered by the insurance policy;
(4) provide a detailed, claimant- and claim-specific
description of the acts or omissions by each insurer or agent that
constitute a violation of a provision of the insurance policy, a
statute, a provision of the Texas Administrative Code, or a common
law standard of conduct;
(5) except as provided by Subsection (b-1), state the
specific amount of money alleged to be owed by the insurer on the
claim for the damage to or loss of covered property described by
Subdivision (2);
(6) state [and
[(3)] the amount of reasonable and necessary
attorney’s fees incurred by the claimant to investigate the claim
and prepare the notice required by this section, calculated by
multiplying the number of hours actually worked by the claimant’s
attorney, as of the date the notice is given and as reflected in
contemporaneously kept time records, by an hourly rate that is
customary for similar legal services; and
(7) include the attorney’s contemporaneously kept time
records and all existing estimates, invoices, statements,
receipts, engineer’s or inspector’s reports, or other items
constituting proof of the alleged loss that are possessed by the
claimant or subject to the claimant’s control.
(b-1) Instead of stating the specific amount of money
alleged to be owed as required by Subsection (b)(5), a claimant may
state that the claimant needs additional time to evaluate and
quantify the claim before the claimant states an amount the
claimant will accept in full payment of the claim. By making this
statement, the claimant temporarily postpones the claimant’s
obligation to comply with that subsection as provided by Section
542A.005.
(b-2) The purpose of the notice required by this section is
to enable an insurer to adjust and, if the insurer chooses, satisfy
a claimant’s claim by paying the amount the claimant has alleged is
owed on the claim. The amount alleged by the claimant to be owed on
the claim must be an amount the claimant will accept in full payment
of the claim.
(b-3) Notwithstanding Subsection (e), an insurer may pay
the amount the claimant alleges is owed on the claim and pursue an
action under Chapter 37, Civil Practice and Remedies Code, to
determine the reasonableness or necessity of attorney’s fees
allegedly incurred by the claimant as stated in the claimant’s
notice.
(g) At the option of a person to whom notice was given,
notice [Notice] given under this chapter is admissible in evidence
in a civil action or alternative dispute resolution proceeding
relating to the claim for which the notice is given.
SECTION 3. Section 542A.004, Insurance Code, is amended to
read as follows:
Sec. 542A.004. INSPECTION. Not later than the 15th [30th]
day after receiving a presuit notice given under Section
542A.003(a), a person to whom notice is given may send a written
request to the claimant to inspect, photograph, or evaluate, in a
reasonable manner and at a reasonable time, the property that is the
subject of the claim. If reasonably possible, the inspection,
photography, and evaluation must be completed not later than the
30th [60th] day after the date the person receives the presuit
notice.
SECTION 4. Section 542A.005, Insurance Code, is amended by
amending Subsections (a), (b), (c), (d), and (e) and adding
Subsections (d-1), (g), and (h) to read as follows:
(a) In addition to taking any other act allowed by contract
or by any other law, a person against whom an action to which this
chapter applies is pending may file a plea in abatement not later
than the 30th day after the date the person files an original answer
in the court in which the action is pending if the person:
(1) did not receive a presuit notice fully complying
with Section 542A.003; [or]
(2) received a presuit notice under Section 542A.003
stating that more time is needed for the claimant to state an amount
the claimant will accept in full payment of the claim; or
(3) requested under Section 542A.004 but was not
provided a reasonable opportunity to inspect, photograph, or
evaluate the property that is the subject of the claim.
(b) The court shall abate the action if the court finds that
the person filing the plea in abatement:
(1) did not, for any reason, receive a presuit notice
fully complying with Section 542A.003; [or]
(2) received a presuit notice under Section 542A.003
stating that more time is needed for the claimant to state an amount
the claimant will accept in full payment of the claim; or
(3) requested under Section 542A.004 but was not
provided a reasonable opportunity to inspect, photograph, or
evaluate the property that is the subject of the claim.
(c) An action is automatically abated without a court order
beginning on the 11th day after the date a plea in abatement is
filed if the plea:
(1) is verified and alleges that the person against
whom the action is pending:
(A) did not receive a presuit notice fully
complying with Section 542A.003; [or]
(B) received a presuit notice under Section
542A.003 stating that more time is needed for the claimant to state
an amount the claimant will accept in full payment of the claim; or
(C) requested under Section 542A.004 but was not
provided a reasonable opportunity to inspect, photograph, or
evaluate the property that is the subject of the claim; and
(2) is not controverted by an affidavit filed by the
claimant before the 11th day after the date the plea in abatement is
filed.
(d) An affidavit described by Subsection (c)(2)
controverting whether the person against whom the action is pending
received a presuit notice fully complying with Section 542A.003 or
stating that more time is needed for the claimant to state an amount
the claimant will accept in full payment of the claim under Section
542A.003 must:
(1) include as an attachment a copy of the document the
claimant sent to give notice of the claimant’s action; and
(2) state the date on which the notice was given.
(d-1) If an affidavit described by Subsection (c)(2) is
timely filed by a claimant, the court must enter an order abating
the action unless the court finds that the claimant’s controverting
affidavit establishes that the claimant timely provided a presuit
notice to the movant that fully complied with Section 542A.003,
including the requirement that the notice state an amount the
claimant will accept in full payment of the claim.
(e) An abatement under this section continues until the
later of:
(1) the 60th day after the date a notice fully
complying with Section 542A.003, including the requirement that the
notice state an amount the claimant will accept in full payment of
the claim, is given; or
(2) the 15th day after the date of the requested
inspection, photographing, or evaluating of the property is
completed.
(g) The filing of a plea in abatement stays all discovery in
the action until an order overruling the plea is signed by the trial
court or the abatement period provided by Subsection (e) has
expired.
(h) Prejudgment interest, interest under Section 542.060,
or interest that might be awarded under any other law does not
accrue while an action is abated under this section.
SECTION 5. Section 542A.007(d), Insurance Code, is amended
to read as follows:
(d) If a defendant in an action to which this chapter
applies pleads and proves that the defendant was entitled to but was
not given a presuit notice stating the specific amount alleged to be
owed by the insurer under Section 542A.003(b)(2) at least 61 days
before the date the action was filed by the claimant, the court may
not award [to the claimant] any attorney’s fees to the claimant
under any law [incurred after the date the defendant files the
pleading with the court]. A pleading under this subsection must be
filed not later than the 30th day after the date the defendant files
an original answer in the court in which the action is pending.
SECTION 6. (a) Section 542.060(c), Insurance Code, as
amended by this Act, applies only to a claim, as defined by Section
542A.001, Insurance Code, made on or after the effective date of
this Act. A claim made before the effective date of this Act is
governed by the law as it existed immediately before the effective
date of this Act, and that law is continued in effect for that
purpose.
(b) Chapter 542A, Insurance Code, as amended by this Act,
applies only to an action that is filed on or after the effective
date of this Act. An action filed before the effective date of this
Act is governed by the law as it existed immediately before the
effective date of this Act, and that law is continued in effect for
that purpose.
SECTION 7. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2025.
