SAN ANTONIO, TX – When the May 2025 derecho tore through Texas with 100+ mph winds, it left billions in damage across Harris County and beyond. Commercial property owners in San Antonio felt the impact too—shattered windows, collapsed roofing, and weeks of business interruption.
But for many San Antonio businesses, the real storm hit afterward: insurers dragging their feet on paying valid claims. Delays, lowball offers, and endless investigations have become standard practice. What these insurers don't advertise is that Texas law gives policyholders a powerful weapon to fight back: 18% annual penalty interest on delayed claims.
The Texas Prompt Payment of Claims Act (Chapter 542 of the Insurance Code) sets strict deadlines for insurers. Miss them without reasonable cause, and they owe policyholders penalty interest that can add tens or hundreds of thousands of dollars to final settlements—plus attorney fees.
Yet many San Antonio business owners don't know this law exists. Insurers count on that ignorance. It's time to change that.
Texas Prompt Payment Act: The Deadlines Insurers Must Meet
Chapter 542 was designed to "promote the prompt payment of insurance claims." It establishes clear timeframes insurers must follow:
15-day deadline: After receiving your claim, the insurer must acknowledge it and request any information they reasonably need.
30-day deadline: After receiving all requested information, the insurer must approve or deny the claim.
5-day deadline: After approving a claim, the insurer must issue payment.
60-day maximum: If the insurer requests additional information or needs extended time, they can't drag out decisions beyond 60 days total after receiving everything.
The penalty for violations: 18% annual interest on the unpaid claim amount, calculated from the date payment should have been made.
Example: A $200,000 commercial property claim delayed 6 months beyond the statutory deadline = $18,000 in penalty interest, plus the business owner's attorney fees.
That 18% rate far exceeds most businesses' cost of capital, making delays expensive for insurers—if policyholders know to demand it.
Five Tactics Insurers Use to Delay San Antonio Storm Claims
Despite clear statutory deadlines, insurers regularly violate the Prompt Payment Act. Here's how:
Tactic 1: The Rolling Document Request
Instead of asking for all necessary information upfront, insurers request documents in waves:
- Week 1: "We need photos of the damage"
- Week 3: "We need contractor estimates"
- Week 5: "We need three competitive bids"
- Week 7: "We need an engineering report"
- Week 9: "We need proof of property values"
Each request resets the 30-day clock, allowing insurers to delay indefinitely while technically complying with the statute.
Defense: Submit comprehensive documentation with your initial claim—photos, videos, estimates, financial records, engineering reports. Don't wait for them to ask. The more complete your initial submission, the harder it is for insurers to justify delays.
Tactic 2: Claiming Pre-Existing Damage
This is the #1 denial tactic for roofing and structural claims. Adjusters photograph minor wear (slight granule loss, small cracks, edge curling) and argue the roof was already damaged before the storm.
Their argument: "The roof was at 60% of its useful life. The storm just accelerated inevitable failure."
Your challenge: Proving the roof was functional before the storm and that the storm—not gradual deterioration—caused the failure.
Defense: Conduct annual roof inspections and keep reports on file. If you have a recent inspection showing the roof was sound, insurers can't claim pre-existing damage. Post-storm, hire an independent engineer immediately to document that damage patterns are consistent with sudden wind events, not gradual failure.
Tactic 3: Causation Disputes
Insurers blame damage on excluded perils:
- "The roof damage was caused by hail, not wind" (if your policy excludes hail)
- "The water damage was from flooding, not wind-driven rain" (if you don't have flood coverage)
- "The damage resulted from poor maintenance, not the storm"
These disputes require expensive expert analysis, delaying claims for months or years.
Defense: Forensic engineers can determine causation through scientific analysis. Wind damage has distinct patterns (uplift, peeling, directional tears) that differ from hail (circular impact marks) or maintenance issues (isolated deterioration). Pay for expert analysis immediately after storms, before evidence deteriorates.
Tactic 4: Business Interruption Calculation Games
Business interruption (BI) claims compensate for lost income during reconstruction. But insurers minimize these claims by:
Disputing the restoration period: "Repairs should take 2 months, not 6." (Ignoring contractor shortages and supply chain issues after major disasters.)
Challenging income calculations: "Your revenue projections are inflated. We'll only pay based on last year's revenue." (Ignoring seasonal variations and growth trends.)
Excluding extended costs: "We won't pay for extra months caused by contractor delays." (Even though post-disaster delays are foreseeable.)
Defense: Document everything—contractor availability, material costs, permit delays, supply chain issues. Build a detailed timeline showing why extended restoration periods were necessary and unavoidable.
Tactic 5: The Lowball Settlement Offer
Insurers count on business owners being desperate for cash. They offer settlements far below actual losses, hoping you'll take the money and sign away rights to additional claims.
Their pitch: "We're offering $75,000 to settle quickly so you can move forward. This is our best and final offer."
The reality: Independent appraisal shows actual loss is $280,000. But if you accept the $75,000 and sign the release, you're done—even if you later discover the offer was grossly inadequate.
Defense: Never accept the first offer without independent valuation. Texas law gives you leverage—insurers who unreasonably delay face 18% penalty interest and attorney fees. Use that leverage.
How to Enforce the 18% Penalty Interest
Knowing the law exists isn't enough. You must actively enforce it. Here's how:
Step 1: Document Every Date
From day one, track:
- Date you filed the claim
- Date insurer acknowledged receipt
- Date you provided each requested document
- Date insurer received complete documentation
- 30-day deadline for approval/denial
- Date payment should have been issued
If the insurer misses the 30-day deadline after receiving all documentation, penalty interest begins accruing.
Step 2: Calculate the Interest Owed
Formula: (Unpaid claim amount) × 18% ÷ 365 days × (days delayed)
Example: $150,000 claim unpaid for 180 days beyond statutory deadline
- $150,000 × 0.18 = $27,000 annual interest
- $27,000 ÷ 365 = $73.97 per day
- $73.97 × 180 days = $13,315 penalty interest
This amount gets added to your claim settlement, plus your attorney fees if you sue.
Step 3: Send a Formal Demand Letter
Once the insurer has missed statutory deadlines, send a demand letter citing Texas Insurance Code Chapter 542:
"Your company acknowledged our claim on [date] and received all requested documentation on [date]. Under Texas Insurance Code § 542.058, you were required to approve or deny the claim by [date] and issue payment within 5 days of approval.
You have now exceeded the statutory deadline by [X] days. Under § 542.060, you owe penalty interest of 18% per annum on the unpaid claim amount, calculated from [date]. This interest currently totals $[amount] and continues accruing daily.
We demand immediate payment of the full claim amount plus accrued penalty interest. If payment is not received within 10 business days, we will file suit seeking the claim amount, penalty interest, and attorney fees as provided by statute."
Many insurers settle quickly once they realize you're serious about enforcing the statute—because the 18% interest and attorney fees make delaying more expensive than paying.
Step 4: File Suit If Necessary
If the insurer still won't pay, file a lawsuit in state court. Texas allows you to recover:
- The full claim amount
- 18% penalty interest from the date payment was due
- Your attorney fees
- Court costs
The key advantage: Because the statute provides for attorney fees, many insurance lawyers will take cases on contingency. You pay nothing unless you recover.
When Does Penalty Interest NOT Apply?
The 18% penalty interest isn't automatic. Insurers can avoid it by showing they had "reasonable basis" for delays. Examples where penalty interest might not apply:
- The claim genuinely required complex investigation beyond standard timelines
- You failed to provide requested documentation in a timely manner
- There were legitimate coverage questions requiring legal interpretation
- The insurer paid within statutory deadlines (even if you disagreed with the amount)
But note: disagreeing about claim value isn't a "reasonable basis" to avoid paying what's clearly owed. If an adjuster says your $100,000 loss is worth $40,000, they still must pay the $40,000 within statutory deadlines or face penalty interest on that amount.
Four Steps San Antonio Businesses Should Take Now
Step 1: Know Your Policy Deadlines
Some commercial policies contain "suit limitations" clauses requiring lawsuits within 1-2 years of damage. Read your policy now—not after a storm.
Look for sections titled:
- "Legal Action Against Us"
- "Suit Limitations"
- "Time Limit for Bringing Action"
If your policy requires suit within 12 months, you must file within that timeframe—even if the Prompt Payment Act gives you longer.
Step 2: Document Property Condition Before Disaster Strikes
The best defense against "pre-existing damage" claims is contemporaneous documentation:
- Annual professional roof inspections
- Photographs of building condition
- Engineering reports of critical systems
- Maintenance records
Store this documentation off-site (cloud storage, attorney's office) so it survives disasters.
Step 3: Hire Professionals Immediately After Damage
Don't wait for the insurer's adjuster. Hire your own team:
- Public adjuster: Works for you, not the insurer
- Forensic engineer: Documents damage and determines causation
- Restoration contractor: Provides detailed repair estimates
- Insurance attorney: Advises on coverage and enforces your rights
Yes, these professionals cost money. But they often increase settlements by 2-5x their cost, making them a profitable investment.
Step 4: Know When to Fight and When to Settle
Not every dispute justifies litigation. Consider:
- Claim size: Is the potential recovery worth the cost of fighting?
- Strength of evidence: Do you have solid documentation?
- Insurer's position: Are they clearly wrong, or is there legitimate disagreement?
- Time value: Would accepting a lower settlement let you reopen faster?
Example: If the insurer offers $180,000 and you think you're owed $220,000, the $40,000 difference might not justify 12-18 months of litigation—especially if you need funds immediately to reopen.
But if they offer $60,000 on a clearly valid $300,000 claim, fight. That's where the 18% penalty interest becomes your most powerful weapon.
The Bigger Picture: Why Enforcement Matters
Texas's Prompt Payment Act only works if policyholders enforce it. Insurers violate the statute because they calculate that most policyholders won't fight back—either because they don't know the law exists or because they can't afford attorneys.
The 18% penalty interest and attorney fees provision level the playing field. When insurers know you'll enforce your rights, they settle faster and more fairly.
San Antonio business owners: Don't let insurers profit from delays. Document dates, calculate penalty interest, demand what you're owed, and enforce the statute. Texas law is on your side—but only if you use it.
Source: Texas Insurance Code Chapter 542, Voss Law Firm, Green Trial Law, Texas Department of Insurance