Skip to Content
Storm-related claims in Texas often lead to disputes over attorneys’ fees, making it critical for insurance carriers to understand and apply statutory pre-suit notice requirements. Failure by claimants to meet these requirements can significantly reduce a carrier’s exposure in litigation.
Understanding Chapter 542A
Chapter 542A of the Texas Insurance Code was enacted to combat a surge in lawsuits stemming from severe weather events. It applies to first-party property insurance claims resulting from “acts of nature,” such as storms. The law requires claimants to provide written notice at least 61 days before filing suit. This notice must include:
- A description of the acts or omissions causing the claim.
- The specific amount the claimant alleges the insurer owes for damages.
- The attorneys’ fees incurred to date, supported by time records detailing the hours worked and hourly rate.
If an attorney prepares this notice, they must also send a copy to the claimant and include a statement verifying that the claimant received it.
Why Pre-Suit Notice Matters
Failing to provide proper notice can have serious consequences for claimants. Defendants may file a motion to exclude attorneys’ fees incurred after the original answer is filed. For insurance carriers, this offers a valuable opportunity to reduce financial exposure and gain leverage in settlement negotiations.
Timing and Key Requirements
Under § 542A.007(d), defendants must act swiftly. A motion to preclude attorneys’ fees for insufficient notice must be filed within 30 days of the original answer, even if the case is removed to federal court. To succeed, the motion should include:
- Evidence that the claim arises from a “force of nature,” bringing it under Chapter 542A.
- Confirmation that the defendant is a “person” entitled to notice under the law.
- Key dates, including when the lawsuit was filed and the original answer was submitted.
- A detailed explanation of how the pre-suit notice failed to meet statutory requirements.
While the motion need not recount the entire insurance claim’s history, it should clearly outline these essential facts to the court.
Navigating Exceptions: Impracticability
Claimants often argue “impracticability” to excuse non-compliance with notice requirements. This defense asserts that pre-suit notice was impossible because the statute of limitations was near expiration. However, courts have set a high threshold for this exception, emphasizing that it is reserved for cases where notice genuinely could not be provided. Defense attorneys should closely examine the claimant’s evidence, highlighting any gaps or inconsistencies.
The Broader Impact of Chapter 542A
Chapter 542A’s pre-suit notice requirements were designed to encourage transparency and early resolution of disputes. When properly utilized, the statute offers defense attorneys a tactical advantage. By identifying and challenging notice deficiencies early, carriers can reduce litigation costs, avoid unnecessary payouts, and potentially influence the trajectory of the case.
Conclusion
In any storm-related dispute, defense attorneys and insurers should prioritize reviewing the claimant’s compliance with Chapter 542A. Successfully challenging deficient notice not only reduces exposure to attorneys’ fees but also provides leverage to negotiate favorable resolutions. Understanding the timing and technicalities of this process is essential for effectively defending against storm-damage claims.
