Policyholder Alert :: Texas Winter Storm Uri Claims Subject To 61-Day Pre-Suit Notice

Policyholder Alert :: Texas Winter Storm Uri Claims Subject To 61-Day Pre-Suit Notice

As we approach the two-year anniversary of the “big freeze” in Texas (a/k/a Winter Storm Uri), policyholders with storm-related claims should be aware that Chapter 542A of the Texas Insurance Code limits a policyholder’s ability to sue its insurers for mishandling property insurance claims arising from natural disasters. Designed to curb the exploitation of storm victims and insurance companies, Chapter 542A imposes significant hurdles for policyholders and, importantly, the statute impacts the avalanche of Winter Storm Uri claims being pursued by policyholders across the Lone Star State. With the two-year mark looming, policyholders should identify the statutes of limitations applicable to their claims and ensure that sufficient time is allotted for giving timely pre-suit notice pursuant to Chapter 542A.

Although once popularly referred to as a “hailstorm” bill, Chapter 542A applies more broadly to any “first-party claim . . . made by an insured” under a property insurance policy that “arises from damage to or loss of covered property caused, wholly or partly, by forces of nature, including an earthquake or earth tremor, a wildfire, a flood, a tornado, lightning, a hurricane, hail, wind, a snowstorm, or a rainstorm."The Chapter applies to actions alleging breach of contract, negligence, misrepresentation, fraud, or breach of a common law duty, or an action brought under Chapter 541 or 542 of the Texas Insurance Code or the Deceptive Trade Practices Act (“DTPA”).2

Chapter 542A restricts policyholders’ rights and remedies in several ways including: (1) a requirement that the policyholder must provide notice of any claim at least 61 days before filing a lawsuit, with enhanced consequences for noncompliance; and (2) limitations on recoverable attorney’s fees and penalty interest.   

Pre-Suit Notice and Inspection

Section 542A.003 requires a claimant to give written notice to its insurer “not later than the 61st day before the date a claimant files an action.” This pre-suit notice must include: “a statement of the acts or omissions giving rise to the claim; the specific amount alleged to be owed by the insurer on the claim for damage to or loss of covered property; and the amount of reasonable and necessary attorney’s fees incurred by the claimant.”This notice requirement is intended “to discourage litigation and encourage settlements” by allowing the defendant-insurer “a right and opportunity to make a settlement offer."4 Although the notice and abatement provisions of Chapter 542A present procedural requirements, some courts have found that “their relationship to Texas’s substantive policy for claims brought under the Texas Insurance Code requires that they be applied in federal court.”5

Pre-suit notice is not required for an action asserted as a counterclaim or if giving notice is “impracticable” because the claimant has a reasonable basis for believing the statute of limitations will run before notice can be given. The policyholder must plead and offer some proof to establish this statutory-limitations exception to the pre-suit notice requirement.7 Simply stating that the impending expiration of the limitations period made the notice impracticable is insufficient.8And, importantly, courts are split on whether sending notice can be rendered “impracticable” based on the timeframe in which the policyholder obtains legal representation, since the Texas Legislature anticipated that the notice could be sent by a representative of the claimant other than an attorney.9

A notice letter containing specific factual allegations supporting the policyholder’s causes of action “or at least enough information to imply those facts,” satisfies the notice requirement.10 In addition, Chapter 542A requires the pre-suit notice to provide: “the amount of reasonable and necessary attorney’s fees incurred by the claimant, 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.”11 Courts are split on whether the pre-suit notice must include both the amount of fees and the calculation performed in accordance with the statutory requirements.12

Although supporting documentation is not required for the pre-suit notice, courts have applied the Chapter 542A notice provision strictly, requiring adherence to its technical mandates.13 For example, an attorney or other representative giving the notice is required to provide a copy of the notice to the policyholder and “include in the notice a statement that a copy of the notice was provided to the [policyholder].”14 Even if a copy of the notice was given to the policyholder, a notice lacking the statement that a copy of it was given to the policyholder fails, as a matter of law, to satisfy the statutory notice requirements.15

The policyholder’s failure to provide written notice as required by section 542A.003 or to allow a reasonable opportunity to inspect the property permits the insurer to file a plea in abatement within 30 days of filing its answer in the action.16 Section 542A.003, which includes the requirement that a suit be abated for failure to provide notice, is similar to Insurance Code section 541.0154, which requires pre-suit notice of claims under Chapter 541 of the Insurance Code, and Texas Business and Commerce Code section 17.505, which requires pre-suit notice of claims pursuant to the Deceptive Trade Practices Act. Unlike the provisions in the DTPA and Chapter 541, however, failure to comply with section 542A.003 can limit the policyholder’s recovery of attorney’s fees, as discussed below. Chapter 542A’s pre-suit notice does not relieve a claimant of any other obligation to provide notice.17

Chapter 542A also creates a statutory right for the insurer to “inspect, photograph, or evaluate” the property at issue.18 The insurer’s request must be made no later than 30 days after the insurer receives written notice.19


Chapter 542A substantially limits the amount of attorney’s fees a policyholder can recover against its insurer, ties the recovery of attorney’s fees to compliance with the pre-suit notice provisions and an accurate prediction of the damages that are ultimately awarded, and reduces the amount of statutory interest available for claims that fall within the Chapter.

First, and importantly, the failure to provide the required pre-suit notice may limit the policyholder’s recovery of attorney’s fees. The court “may not award to the claimant any attorney’s fees incurred after” the date on which the insurer files a pleading stating that it was entitled to, but did not receive, the pre-suit notice. 20 In view of this provision, policyholders and their counsel may consider calendaring not only the date by which suit must be brought, but also the deadline for providing pre-suit notice—at least 61 days earlier—to avoid missing the notice deadline.

Second, the court may reduce the attorney’s fees awarded to a policyholder based upon the alleged damages set forth in the pre-suit notice. A claimant is entitled to the “lesser of” its reasonable fees or the amount determined by a formula comparing the actual damages awarded to the amount alleged in the pre-suit notice.21 If a jury finds at least 80% of the damages alleged in the pre-suit notice, the policyholder can recover its full attorney’s fees.22 If a jury finds 20% or less of the damages alleged in the pre-suit notice, a policyholder is precluded from recovering any attorney’s fees.23 If a jury finds between 20% and 80% of the damages alleged in the pre-suit demand, a policyholder may recover only that percentage of attorney’s fees—at least with respect to claims brought under Chapter 542A.24 This provision effectively conditions recovery of attorney’s fees on an accurate prediction of the damages a jury will find following trial, so care must be exercised in developing the amount of loss to be included in the pre-suit notice.

Notably, some courts have construed this formula as effectively precluding any recovery of attorney’s fees when an insurer timely pays an appraisal award, extinguishing the policyholder’s claim for policy damages.25

Finally, Chapter 542A amends Texas Insurance Code section 542.060, which allows a policyholder to recover 18% interest on a claim if the insurer has failed to comply with Chapter 542. Claims brought pursuant to Chapter 542A are limited to interest in the amount of the current interest rate plus 5%.26 Based on the judgment interest rate in December 2022, penalty interest on Chapter 542A claims is 12%, substantially less than the 18% penalty applicable to other first-party claims under Chapter 542.


Policyholders pursuing property and business interruption claims arising from Winter Storm Uri should plan ahead to avoid the timing traps imbedded in Chapter 542A. To ensure compliance with the pre-suit notice requirements, policyholders should determine the earliest point at which the shortest limitations period began to run on their storm claims, then calendar the notice deadline along with the suit deadline—leaving sufficient time to provide notice at least 61 days before suit must be filed.

Insurance lawsuits arising from weather-related property damage in Texas commonly assert causes of action for breach of contract, breach of the duty of good faith and fair dealing, and violations of the Texas Insurance Code and the Texas Deceptive Trade Practices Act (although there could be others).27  And importantly, causes of action for breach of the duty of good faith and fair dealing and for violations of the Texas Insurance Code or the Texas Deceptive Trade Practices Act are governed by a two-year statute of limitations, which generally runs from the date of the insurer’s wrongful conduct.28

Policyholders should consult their policies to identify all provisions that impact their rights with respect to litigation against the insurer, including any provisions that purport to shorten the period within which suit must be brought. We then recommend that the policyholder identify the first instance of insurer misconduct, analyze limitations, calendar the suit and notice deadlines, and begin preparation to meet those deadlines. With the two-year anniversary of Winter Storm Uri just around the corner, policyholders who have not conducted this analysis should act quickly to ensure that they have allotted sufficient time for preparing and giving notice at least 61 days before suit must be filed.


Amy Stewart Law assists corporate policyholders with strategic advice relating to pre-litigation claim negotiations and coverage denials, indemnity and insurance provisions in third-party contracts, insurance procurement and renewal issues, and complex high-stakes insurance coverage and bad faith litigation. Contact us at inquire@amystewartlaw.com for more information.



Tex. Ins. Code § 542A.001(2).

Tex. Ins. Code § 542A.002(a).

Tex. Ins. Code § 542A.003(b).

Jordan Indus., LLC v. Travelers Indem. Co. of Am., No. 7:21-cv-00114-O, 2022 WL 2719630, at *2 (N.D. Tex. Apr. 12, 2022) (Report & Recommendation of Mag. J.); Carrizales v. State Farm Lloyds, No. 3:18-CV-0086, 2018 WL 1697584, at *2 (N.D. Tex. Apr. 6, 2018); see also Kiwi Hosp.—Houston, LLC v. Mt. Hawley Ins. Co., No. H-19-3173, 2020 WL 6278694, at *2 (S.D. Tex. May 8, 2020); Vuong Huynh Corp. v. Certain Underwriters at Lloyd’s, London, No. 1:19-CV-00373, 2019 WL 11268988, at *2 (E.D. Tex. Dec. 23, 2019); Davis v. Allstate Fire and Cas. Ins. Co., No. 4:18-CV-00075, 2018 WL 3207433, at *1 (E.D. Tex. Jun. 29, 2018).

Carrizales, 2018 WL 1697584, at *4; Davis, 2018 WL 3207433, at *3; Hospitality Ops., LLC v. AmGuard Ins. Co., No. 1:19-CV-00482, 2019 WL 11690209, at *1 (E.D. Tex. Dec. 2, 2019); Vuong Huynh, 2019 WL 11268988, at *2.

Tex. Ins. Code § 542A.003(d).

Hospitality Ops., 2019 WL 11690209, at *2.

Id. (“For performance to be truly impracticable, the duty must become much more difficult or much more expensive to perform, and this difficulty or expense must have been unanticipated.”); Pemberton v. Unitrin Preferred Ins. Co., No. 1:21-CV-00452-RP, 2022 WL 2763160 (W.D. Tex. Jan. 6, 2022) (declining to excuse insured’s failure to provide the required pre-suit notice when plaintiff failed to file a claim until four years after alleged damage and waiting nearly two years following denial of the claim to hire counsel: “[a]llowing Plaintiff to avoid his pre-suit notice obligations . . . incentivizes claimants to wait until the last minute to hire an attorney, all to the disadvantage of the Defendant.”), report and recommendation adopted by 2022 WL 2763157 (Mar. 16, 2022); Vuong Huynh, 2019 WL 11268988, at *3 (“genuine belief” that limitations might run sooner than 60 days from date of notice does not constitute the pleading and proof required to establish the statutory-limitations exception to the pre-suit notice requirement); Nexxt Holding Inc. v. Travelers Cas. Ins. Co. of Am., No. H-20-817, 2020 WL 5702095, at *1 (S.D. Tex. Sept. 24, 2020) (error in calculating expiration of statute of limitations held insufficient to demonstrate impracticability under notice requirement); Tadeo as Trustee of John E. Milbauer Trust v. Great N. Ins. Co., No. 3:20-CV-00147, 2020 WL 4284710, at *8 (N.D. Tex. Jul. 27, 2020) (“A finding of impracticability … ought to be reserved for those instances in which pre-suit notice genuinely cannot be provided.”).

Tex. Ins. Code § 542A.003(c); compare Hlavinka Equip. Co. v. Nationwide Agribusiness Ins. Co., 546 F. Supp. 3d 534, 537 (holding that waiting to hire counsel not valid justification. Instead “a claimant must provide an explanation for why it hired an attorney at the particular time it did.”) and Elevia, Inc. v. AmGuard Ins. Co., No. H-19-4028, 2019 WL 10894131, at *1 (S.D. Tex. Dec. 20, 2019) (rejecting insured’s argument that notice was impracticable based on when it obtained legal representation)  with Tipton v. State Farm Lloyds, 4:18-CV-00339, 2018 WL 10561527, at *2 (N.D. Tex. June 19, 2018) (exception to notice requirement established where, at time retained, attorney had good faith belief limitations would expire less than 60 days).

10 Davis, 2018 WL 3207433, at *3; see also Perrett v. Allstate Ins. Co., 354 F. Supp. 3d 755, 758 (S.D. Tex. 2018) (notice letter sufficiently gave insurer a basis from which to imply the facts giving rise to the policyholder’s claims); White v. State Farm Lloyds, No. 7:18-CV-359, 7:18-CV-411, 7:18-CV-412, 7:18-CV-413, 2018 WL 8803380, at *3 (S.D. Tex. Dec. 27, 2018) (notice’s scant factual information and boilerplate recitations of legal standards was insufficient to even imply a statement of acts or omissions that could form the basis of insureds’ claims); HHH Properties, Inc. v. State Farm Lloyds, No. H-18-3183, 2018 WL 8787542, *1-2 (S.D. Tex. Nov. 30, 2018) (notice letter minimally satisfied requirements of statute, despite its fluff and large amount of self-serving, conclusory, and argumentative statements, some even mocking the statute itself).

11 Tex. Ins. Code § 542A.003(b)(3).

12 Compare Perrett, 354 F. Supp. 3d at 758 (calculations need not be included in notice) and Tipton, 2018 WL 10561527, at *3 (same) with White, 2018 WL 8803380, at *4 (Under “a plain reading of the statute,” pre-suit notice must include both fee amount and underlying calculations).

13 Vuong Huynh, 2019 WL 11268988, at *1-2; Davis, 2018 WL 3207433, at *3.

14 Tex. Ins. Code § 542A.003(c)(2).

15 See, e.g., Perrett, 354 F. Supp. 3d at 759; Hospitality Ops., 2019 WL 11690209, at *3; Davis, 2018 WL 3207433, at *3.

16 Tex. Ins. Code § 542A.005. See Moncivais v. Allstate Texas Lloyds, No. 5:18-CV-525, 2018 WL 7288580, at *2 (W.D. Tex. Aug. 31, 2018) (denying motion to compel inspection where insurer failed to raise abatement issue within 30 days of filing answer). If abated, the court “may not compel participation in an alternative dispute resolution proceeding until after the abatement period” has expired. Tex. Ins. Code § 542A.005(f).

17 Tex. Ins. Code § 542A.003(f).

18 Tex. Ins. Code § 542A.004.

19 Id.

20 Tex. Ins. Code § 542A.007(d) (emphasis added). See, e.g., Satija v. Evanston Ins. Co., No. A-22-CV-00408-RP, 2022 WL 2438171, at *2 (W.D. Tex. July 5, 2022) (denying attorney’s fees incurred by policyholder after date insurer filed motion to deny fees due to lack of pre-suit notice); Gateway Plaza Condo v. Travelers Indem. Co. of Am., No. 3:19-CV-01645, 2019 WL 7187249, at *3 (N.D. Tex. Dec. 23, 2019); see also PMG Int’l, Ltd. v. The Travelers Indem. Co. of Am., No. 20-CV-00148, 2020 WL 1164116 (W.D. Tex. Mar. 11, 2020) (same); Kiwi Hosp.—Houston, 2020 WL 6278694; Vuong Huynh Corp. v. Certain Underwriters at Lloyd’s, London, No. 1:19-CV-00373, 2020 WL 6992868, *2-3 (E.D. Tex. Sept. 22, 2020); but see Jordan Industries, 2022 WL 2719630, at *4-5 (granting insured’s motion to voluntarily dismiss the case filed before insurer’s motion to preclude attorney’s fees and noting that “the Court cannot preclude [insured] from recovering attorney’s fees in a subsequently filed case” so long as pre-suit notice provided)

21 Tex. Ins. Code § 542A.007(a).

22 Tex. Ins. Code § 542A.007(b).

23 Tex. Ins. Code § 542A.007(c).

24 Tex. Ins. Code § 542A.007(a)(3).

25 See Trujillo v. Allstate Vehicle and Prop. Ins. Co., No. H-19-3992, 2020 WL 6123131, at *6 (S.D. Tex. Aug. 20, 2020); Pearson v. Allstate Fire & Cas. Ins. Co., No. 19-CV-693, 2020 WL 264107, at *4 (N.D. Tex. Jan. 17, 2020) (“Because Plaintiff chose to exercise the appraisal clause only after filing this lawsuit and Defendant has satisfied its obligation under the clause, the [formula] provision [applies and] results in the lowest fee award possible—zero dollars—because there is no money judgment in Plaintiff’s favor.”); but see Ahmad v. Allstate Fire & Cas. Ins. Co., No. 4:18-CV-4411, 2021 WL 2211799, at *5 (S.D. Tex. June, 1, 2021) (declining to grant summary judgment for insurer on attorney’s fee issue despite paying post-suit appraisal award when Texas Prompt Payment Act claim remained unresolved and when insurer “failed to establish as a matter of law that it paid all the interest to which the Plaintiff is entitled”) (Report & Recommendation of Mag. J.).

26 Tex. Ins. Code § 542.060(c).

27 See generally Nance v. State Farm Cas. Co., No. 2:17-CV-00538-JRG, 2017 WL 7052146 (alleging breach of contract, breach of duty of good faith and fair dealing, and violations of the Texas Insurance Code and the DTPA); Sheppard v. Travelers LLoyds of Tex. Ins. Co., No. 14-08-00248-CV, 2009 WL 3294997, at *1 (Tex. App.—Houston [14th Dist.] Oct. 15, 2009, no pet.). While a litigant must generally bring a breach of contract action within four years from the date it was denied coverage, this timeframe can be shortened by contract to as little as two years from denial. Tex. Civ. Prac. & Rem. Code §§ 16.004, 16.070; Nance, 2017 WL 7052146, at *3; Bustos v. State Farm Lloyds, No. 4:19-cv-04812, 2020 WL 5745823, at *2 (S.D. Tex. July 13, 2020) (“Texas law recognizes the validity of contract provisions which limit the statute of limitations when enforced by a party alleged to be in breach of the contract”).

28 Tex. Ins. Code § 16.003(a); Tex. Ins. Code § 541.162; Tex. Bus. & Com. Code § 17.565; Nance, 2017 WL 7052146, at *3-4; Bustos, 2020 WL 5745823, at *2 n.2.