Court Finds That Reasonable Payment Of A Claim Does Not Satisfy The Texas Prompt Payment Of Claims Act

 Monday, April 12, 2021

 JD Supra

In Hinojos v. State Farm Lloyds, the Supreme Court of Texas addressed liability under the Texas Prompt Payment of Claims Act (the ‘TPPCA’) when an insurer timely pays only part of a claim.

As demonstrated in Hinojos, disputes as to TPPCA liability typically arise in the context of appraisal and the payment of an award.

In a fairly short opinion, the Court held that timely payments less than the full amount of the ultimate insurance claim do not satisfy an insurer’s duties under the TPPCA.

However, the Court also reiterated that payment of an appraisal award outside the TPPCA’s deadlines does not satisfy a policyholder’s burden to prove an actual TPPCA violation.