I often get asked: “Can I still file a lawsuit against my insurance company for my claim from. . . .” Like all good lawyers my answer is maybe. The reality is that the deadlines to file a lawsuit against an insurance company are controlled by the state law that applies to your claim and the facts of your individual case.

In Texas claims for breach of the duty of good faith and fair dealing and violations of the Texas Insurance Code must be brought within two years after the cause of action accrues. The normal period of bringing a breach of contract claim, four years, is commonly reduced to within two years and a day of the date of accrual by most insurance policies. Simply stated most lawsuits against an insurance company must be filed within two years of when the causes of action accrues. Sounds easy but “when does the causes of action accrue”, you ask?

Recently the United States District Court, Southern District of Texas, Laredo Division revisited this question in Rodriquez v. State Farm Lloyds.1 The insured had a pipe burst of January 6, 2015, and filed the lawsuit against State Farm Lloyds on July 13, 2017. We can all see that more than two years passed between the date of the loss and the filing of the lawsuit, but when did the causes of action accrue?

The court discussed the general rule that a cause of action accrues when facts come into existence that authorize a party to seek a judicial remedy. The court then discussed that in an insurance case both for breach of contract and insurance code violations, a cause of action accrues when the insurer denies the claim.

Next, the court examined the record for when the insurer denied the claim. The competing two possible dates are below:

  1. January 21, 2015 – State Farm sent a letter to insured informing that evaluation over and damage less than deductible.
  2. October 2015 – State Farm administratively closed the claim for the first time.

The insured argued that after the denial letter in January the insurer continued to communicate with the insured and was still investing the claim until the insurer issued a “final denial” in 2016. The court determined that nothing indicated that the insurer ever changed or withdrew its initial claim determination and that reinvestigation itself is insufficient to show a prior decision’s withdrawal or change. Therefore, the court held that the limitations period was never reset, and the lawsuit was time-barred and must be dismissed.

It is always important to consult a lawyer to review the facts of your case to determine when the applicable statutes of limitations has started to run and ultimately when a lawsuit must be filed to preserve your rights.
1 Rodriguez v. State Farm Lloyds, 2018 WL 3966270, No. 5:17-CV-161 (S.D. Tex. Aug. 17, 2018).