I am frequently asked when the statute of limitations expires on property insurance claims in Texas. Here is the short answer:
The statute of limitations for Breach of Contract in Texas is 4 years. But, the property insurance policy usually has a provision that reads: “No one may bring legal action against us under this policy unless…the action is brought within two years and one day after the date on which the direct physical loss or damage occurred.”
This 2-year limitations provision was found to be void in the case Spicewood Summit Office Condominiums Ass’n v. America First Lloyds, 287 S.W.3d 461 (Tex. App.-2009, writ ref’d). The Court held that the 4-year limitations apply.
BUT some policies also have what is known as a “savings clause” which states that if a limitations provision is invalid, the insured must bring suit within the shortest amount of time permitted by law.
There is a split among Texas courts as to whether the savings clause applies.
BOTTOM LINE: It is always best to file suit as soon as possible after you feel the insurance policy has been breached. But even if it has been more than two years but less than 4 years since the loss occurred, you probably still have the chance to file suit.
The Statute of Limitations on Bad Faith (Texas Insurance Code 541) is two years from the date of the deceptive act or practice. An insured may get an additional 180 days if the insured can show that he was induced to refrain from bringing suit by the insurer.
The Statute of Limitations under the Deceptive Trade Practices Act is also 2 years from the date of the deceptive practice or act.
Of course, it is always best to investigate the claim and file suit as quickly as possible. If you have a specific question about the Statute of Limitations in Texas as relates to property insurance claims, contact my office at Hoch Law Firm and let’s talk.