Texas Codes

Tex. Ins. Code § 541.060 (2026)

Unfair Settlement Practices

✓ current as of May 2026

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Sec. 541.060. UNFAIR SETTLEMENT PRACTICES. (a) It is an unfair method of competition or an unfair or deceptive act or practice in the business of insurance to engage in the following unfair settlement practices with respect to a claim by an insured or beneficiary:

(1) misrepresenting to a claimant a material fact or policy provision relating to coverage at issue;

(2) failing to attempt in good faith to effectuate a prompt, fair, and equitable settlement of:

(A) a claim with respect to which the insurer's liability has become reasonably clear; or

(B) a claim under one portion of a policy with respect to which the insurer's liability has become reasonably clear to influence the claimant to settle another claim under another portion of the coverage unless payment under one portion of the coverage constitutes evidence of liability under another portion;

(3) failing to promptly provide to a policyholder a reasonable explanation of the basis in the policy, in relation to the facts or applicable law, for the insurer's denial of a claim or offer of a compromise settlement of a claim;

(4) failing within a reasonable time to:

(A) affirm or deny coverage of a claim to a policyholder; or

(B) submit a reservation of rights to a policyholder;

(5) refusing, failing, or unreasonably delaying a settlement offer under applicable first-party coverage on the basis that other coverage may be available or that third parties are responsible for the damages suffered, except as may be specifically provided in the policy;

(6) undertaking to enforce a full and final release of a claim from a policyholder when only a partial payment has been made, unless the payment is a compromise settlement of a doubtful or disputed claim;

(7) refusing to pay a claim without conducting a reasonable investigation with respect to the claim;

(8) with respect to a Texas personal automobile insurance policy, delaying or refusing settlement of a claim solely because there is other insurance of a different kind available to satisfy all or part of the loss forming the basis of that claim; or

(9) requiring a claimant as a condition of settling a claim to produce the claimant's federal income tax returns for examination or investigation by the person unless:

(A) a court orders the claimant to produce those tax returns;

(B) the claim involves a fire loss; or

(b) Subsection (a) does not provide a cause of action to a third party asserting one or more claims against an insured covered under a liability insurance policy.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.

Notes of Decisions

Cited in 283 cases (120 in the last 5 years), 2005–2026 · leading case: Usaa Texas Lloyds Co. v. Gail Menchaca, 545 S.W.3d 479 (Tex. 2018).

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Usaa Texas Lloyds Co. v. Gail Menchaca, 545 S.W.3d 479 (Tex. 2018). · cites it 4× “, TEX. INS. CODE § 541.060 (prohibiting an insurer from "requiring a claimant as a condition of settling a claim to produce the claimant's federal income tax returns").”

Texas Mut. Ins. Co. v. Ruttiger, 381 S.W.3d 430 (Tex. 2012). · cites it 3× “Tex. Ins.Code § 541.060. TMIC asserts that because the Labor Code and WCD rules set specific deadlines and procedures for both paying and denying workers’ compensation claims and impose administrative penalties for failing to comply with them, allowing recovery under the…”

Mid-Continent Cas. Co. v. Eland Energy, Inc., 795 F. Supp. 2d 493 (N.D. Tex. 2011). · cites it 11× “Mid-Continent maintains that the court should not have submitted a common law tort question to the jury because the only non -Stoivers liability of an insurer for handling a third-party claim is statutory liability under Tex. Ins. Code Ann. § 541.060 (a) (West 2003 & Supp.”

Ramirez v. GEICO, 548 S.W.3d 761 (Tex. App. 2018). · cites it 5× “" TEX.INS.CODE ANN. § 541.060 (a)(2)(A) ; see also USAA Texas Lloyds Co.”

Messersmith v. Nationwide Mut. Fire Ins., 10 F. Supp. 3d 721 (N.D. Tex. 2014). · cites it 4× “Based on these events, Plaintiff alleges that Defendants violated a multitude of laws: Tex. Ins.Code § 541.060; the Prompt Payment of Claims Act, Tex.”

Hall Arts Ctr. Off., LLC v. Hanover Ins. Co., 327 F. Supp. 3d 979 (N.D. Tex. 2018). · cites it 3× “a claim with respect to which the insurer's liability has become reasonably clear[,]" Tex. Ins. Code Ann. § 541.060 (a)(2)(A) (West 2018); "failing within a reasonable time to.”

Excess Underwriters at Lloyd's, London v. Frank's Casing Crew & Rental Tools, Inc., 246 S.W.3d 42 (Tex. 2008). · cites it 2× “[46] See TEX. INS. CODE § 541.060 (prohibiting certain unfair settlement practices).”

Lawyers Title Ins. v. Doubletree Partners, L.P., 739 F.3d 848 (5th Cir. 2014). · cites it 2× “Tex. Ins.Code Ann. § 541.060 (West 2014).”

Lyda Swinerton Builders, Inc. v. Okla. Sur. Co., 903 F.3d 435 (5th Cir. 2018). “See TEX. INS. CODE §§ 541.060(a)(1), 541.061.”

Onebeacon Ins. Co. v. T. Wade Welch & Assocs., 841 F.3d 669 (5th Cir. 2016). “” Tex. Ins. Code § 541.060(a)(2)(A). To have acted “knowingly,” OneBeacon must have acted with actual awareness of the falsity, unfairness, or deceptiveness of the act that made it liable under Chapter 541.”

Escuadra v. Geovera Specialty Ins., 739 F. Supp. 2d 967 (E.D. Tex. 2010). · cites it 6× “Tex. Ins. Code Ann. § 541.060 (a)(4). 5. Refused to pay plaintiffs claim without conducting a reasonable investigation.”

Texas Mut. Ins. Co. v. Ruttiger, 265 S.W.3d 651 (Tex. App. 2008). · cites it 2× “Applying TMI’s rationale, a party would never be able to file suit against an insurer based upon a compensability dispute, no matter how unreasonable the dispute, as long as the insurer promptly provided benefits once it entered into the Benefit Dispute Agreement and agreed to…”

Show all 283 citing cases →

— Tex. Ins. Code § 541.060(1) — 1 case

Dijkman v. AmGuard Ins. Co. (S.D. Tex. 2024).

— Tex. Ins. Code § 541.060(2) — 3 cases

Demondria Jefferson & Demetra Wysinger v. Geico Cnty. Mut. Ins. Co. (Tex. App. 2022).

Griffin Street Mgmt. Inc v. State Farm LLoyds (N.D. Tex. 2020).

Wender v. State Farm Lloyds (N.D. Tex. 2025).

— Tex. Ins. Code § 541.060(2)(A) — 1 case

Ganey v. State Farm Mut. Auto. Ins. Co. (W.D. Tex. 2020).

— Tex. Ins. Code § 541.060(7) — 2 cases

Kathryne Vause v. Liberty Ins. Corp. & Justin A. Smith, 456 S.W.3d 222 (Tex. App. 2014).

Williams v. Minnesota Life Ins. Co. (S.D. Tex. 2023).

— Tex. Ins. Code § 541.060(A)(1) — 1 case

Rio Perla Props., L.P. v. Affiliated FM Ins. Co. (W.D. Tex. 2024).

— Tex. Ins. Code § 541.060(a) — 44 cases

Usaa Texas Lloyds Co. v. Gail Menchaca, 545 S.W.3d 479 (Tex. 2018). “, TEX. INS. CODE § 541.060 (prohibiting an insurer from "requiring a claimant as a condition of settling a claim to produce the claimant's federal income tax returns").”

Texas Mut. Ins. Co. v. Ruttiger, 381 S.W.3d 430 (Tex. 2012). “Tex. Ins.Code § 541.060. TMIC asserts that because the Labor Code and WCD rules set specific deadlines and procedures for both paying and denying workers’ compensation claims and impose administrative penalties for failing to comply with them, allowing recovery under the…”

Weiser-Brown Operating Co. v. St. Paul Surplus Lines Ins., 801 F.3d 512 (5th Cir. 2015).

in Re Crawford & Co., Crawford & Co. Healthcare Mgmt., Inc., Patsy Hogan & Old Repub. Ins. Co., 458 S.W.3d 920 (Tex. 2015).

Zhu v. First Cmty. Ins. Co., 543 S.W.3d 428 (Tex. App. 2018).

— Tex. Ins. Code § 541.060(a)(1) — 56 cases

Lyda Swinerton Builders, Inc. v. Okla. Sur. Co., 903 F.3d 435 (5th Cir. 2018). “See TEX. INS. CODE §§ 541.060(a)(1), 541.061.”

Messersmith v. Nationwide Mut. Fire Ins., 10 F. Supp. 3d 721 (N.D. Tex. 2014). “Based on these events, Plaintiff alleges that Defendants violated a multitude of laws: Tex. Ins.Code § 541.060; the Prompt Payment of Claims Act, Tex.”

Daniel A. Ramirez v. First Liberty Ins. Corp., 458 S.W.3d 568 (Tex. App. 2014).

John Davis D/B/A J.D. House of Style v. Nat'l Lloyds Ins. Co., 484 S.W.3d 459 (Tex. App. 2015).

Lee v. Catlin Specialty Ins. Co., 766 F. Supp. 2d 812 (S.D. Tex. 2011).

— Tex. Ins. Code § 541.060(a)(2) — 37 cases

Lawyers Title Ins. v. Doubletree Partners, L.P., 739 F.3d 848 (5th Cir. 2014). “Tex. Ins.Code Ann. § 541.060 (West 2014).”

Waste Mgmt., Inc. v. AIG Speci, 974 F.3d 528 (5th Cir. 2020).

Texas Mut. Ins. Co. v. Ruttiger, 265 S.W.3d 651 (Tex. App. 2008). “Applying TMI’s rationale, a party would never be able to file suit against an insurer based upon a compensability dispute, no matter how unreasonable the dispute, as long as the insurer promptly provided benefits once it entered into the Benefit Dispute Agreement and agreed to…”

in Re Allstate Cnty. Mut. Ins. Co., 447 S.W.3d 497 (Tex. App. 2014).

— Tex. Ins. Code § 541.060(a)(2)(A) — 52 cases

Tyson Rhine & Sandra Rhine v. Priority One Ins. Co., 411 S.W.3d 651 (Tex. App. 2013).

Bramlett v. Med. Prot. Co., 855 F. Supp. 2d 615 (N.D. Tex. 2012).

Lopez v. United Prop. & Cas. Ins. Co., 197 F. Supp. 3d 944 (S.D. Tex. 2016).

Southland Lloyds Ins. Co. v. David Onofre Cantu & Guadalupe Cantu, 399 S.W.3d 558 (Tex. App. 2011).

— Tex. Ins. Code § 541.060(a)(2)(B) — 1 case

Am. Nat'l Cnty. Mut. Ins. Co. v. Tina Holland (Tex. App. 2019).

— Tex. Ins. Code § 541.060(a)(2)(a) — 1 case

Lauren Moody v. Oscar Ins. Co. (S.D. Tex. 2026).

— Tex. Ins. Code § 541.060(a)(3) — 28 cases

Mid-Continent Cas. Co. v. Eland Energy Inc., e, 709 F.3d 515 (5th Cir. 2013).

Partain v. Mid-Continent Specialty Ins. Servs., Inc., 838 F. Supp. 2d 547 (S.D. Tex. 2012).

Terry v. Safeco Ins. Co. of Am., 930 F. Supp. 2d 702 (S.D. Tex. 2013).

Mid-Continent Cas. Co. v. Eland Energy, Inc., 795 F. Supp. 2d 493 (N.D. Tex. 2011). “Mid-Continent maintains that the court should not have submitted a common law tort question to the jury because the only non -Stoivers liability of an insurer for handling a third-party claim is statutory liability under Tex. Ins. Code Ann. § 541.060 (a) (West 2003 & Supp.”

Escuadra v. Geovera Specialty Ins., 739 F. Supp. 2d 967 (E.D. Tex. 2010). “Tex. Ins. Code Ann. § 541.060 (a)(4). 5. Refused to pay plaintiffs claim without conducting a reasonable investigation.”

— Tex. Ins. Code § 541.060(a)(4) — 14 cases

Columbia Cas. Co. v. Georgia & Florida Railnet, Inc., 542 F.3d 106 (5th Cir. 2008).

Rosenblatt v. Freedom Life Ins. Co. of Am., 240 S.W.3d 315 (Tex. App. 2007).

Mid-Continent Cas. Co. v. Petroleum Solutions, Inc., 248 F. Supp. 3d 837 (S.D. Tex. 2017).

Stewart Info. Servs. Corp. v. Great Am. Ins., 997 F. Supp. 2d 650 (S.D. Tex. 2014).

— Tex. Ins. Code § 541.060(a)(4)(A) — 1 case

— Tex. Ins. Code § 541.060(a)(4)(B) — 1 case

Stewart Info. Servs. Corp. v. Great Am. Ins., 997 F. Supp. 2d 650 (S.D. Tex. 2014).

— Tex. Ins. Code § 541.060(a)(5) — 1 case

Bernal v. Allstate Veh. & Prop. Ins. (S.D. Tex. 2022).

— Tex. Ins. Code § 541.060(a)(6) — 1 case

A&E Austin 1, LTD. v. Nationwide Gen. Ins. Co. (W.D. Tex. 2023).

— Tex. Ins. Code § 541.060(a)(7) — 29 cases

in Re Allstate Cnty. Mut. Ins. Co., 447 S.W.3d 497 (Tex. App. 2014).

Texas Mut. Ins. Co. v. Morris, 287 S.W.3d 401 (Tex. App. 2009).

Terry v. Safeco Ins. Co. of Am., 930 F. Supp. 2d 702 (S.D. Tex. 2013).

— Tex. Ins. Code § 541.060(a)(8) — 1 case

— Tex. Ins. Code § 541.060(a)(l) — 2 cases

Trammell Crow Residential Co. v. Virginia Sur. Co., 643 F. Supp. 2d 844 (N.D. Tex. 2008).

SELERY FULFILLMENT, INC. v. Colony Ins. Co. (E.D. Tex. 2021).

— Tex. Ins. Code § 541.060(b) — 4 cases

Daniel A. Ramirez v. First Liberty Ins. Corp., 458 S.W.3d 568 (Tex. App. 2014).

Christine E. Reule v. Colony Ins. Co., 407 S.W.3d 402 (Tex. App. 2013).

Lasewicz v. Joyce Van Lines, Inc., 830 F. Supp. 2d 286 (S.D. Tex. 2011).

Daniel A. Ramirez v. First Liberty Ins. Corp. (Tex. App. 2015).

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