The carrier paid the appraisal. Now they're refusing the interest.
It's the most common move in Texas property claims today. The insurer drags the file, the policyholder demands appraisal, the panel returns a higher number, the carrier cuts a check for the award — and walks away. No interest. No accountability for the months of delay. The Texas Supreme Court already closed this loophole. Most policyholders never collect anyway.
The pattern is almost identical across files.
After dozens of post-appraisal disputes, the carrier sequence is recognizable enough to be a script. Here's how it runs.
Loss occurs · claim reported
The policyholder reports the claim. Carrier acknowledges receipt and assigns an adjuster. The §542.055 clock starts ticking.
Investigation drags
Document requests pile up. The field adjuster's estimate gets sent to a desk reviewer who slashes scope. The policyholder waits, calls, gets transferred. The §542.058 60-day deadline quietly comes and goes.
Lowball or partial payment
Carrier issues a partial payment well below the actual scope, citing depreciation, "wear and tear," or unwritten policy interpretations. They call this acceptance. They are now in §542.057 territory and don't care.
Policyholder demands appraisal
The policyholder invokes the appraisal clause. Each side appoints an appraiser. The appraisers (or their umpire) inspect the loss and issue a binding award — almost always materially higher than what the carrier paid.
Carrier pays the appraisal — and stops
Carrier issues a check for the appraisal award (less prior payments) and treats the file as closed. No statutory interest. No accountability for the delay. If the policyholder doesn't ask, the carrier doesn't pay.
Statutory interest on every day of delay
Under §542.060 and the Supreme Court's holding in Hinojos, interest accrues on the underpaid portion from the original payment deadline through the date the appraisal award is paid. Months — sometimes years — of up to 18% per annum that the carrier owes by law and routinely doesn't pay.
In 2021, the Texas Supreme Court closed this exact loophole.
For years, Texas insurance carriers leaned on a simple defense: if we paid the appraisal award, we paid the claim, and §542.060 doesn't apply. Many courts agreed. Some still do, until corrected on appeal.
The Supreme Court fixed it in Hinojos v. State Farm Lloyds, 619 S.W.3d 651 (Tex. 2021). The reasoning is direct: if the carrier's pre-appraisal payment was less than the appraisal award, the carrier owed money on the claim that it didn't timely pay. The fact that the appraisal panel later quantified the right amount doesn't undo the delay. The statute punishes the delay, not the eventual payment.
The plain text of §542.060 imposes liability for failing to comply with §542.058 — the carrier's obligation to promptly pay the claim — separate and apart from the carrier's eventual decision to invoke or honor the appraisal process. — Hinojos v. State Farm Lloyds (Tex. 2021)
Two earlier decisions framed the issue and pointed the same direction: Barbara Technologies Corp. v. State Farm Lloyds, 589 S.W.3d 806 (Tex. 2019), held that paying an appraisal award is not, by itself, a determination that the carrier complied with §542.058. Ortiz v. State Farm Lloyds, 589 S.W.3d 127 (Tex. 2019), held that appraisal does not generally bar bad-faith claims. Hinojos brought the doctrine to its conclusion: payment of an appraisal award does not, by itself, satisfy or extinguish §542.060 prompt-payment liability.
That has been the law of Texas for five years. Carriers act like it isn't.
Five tactics carriers use to refuse the interest.
When demand is made for §542.060 interest after appraisal, carriers reach for the same handful of arguments. Each has a documented response that has worked across Texas files.
The "appraisal satisfies §542" argument.
Carrier asserts that paying the appraisal award fully discharged any prompt-payment liability. This is the exact argument the Texas Supreme Court rejected in Hinojos. The reply is a one-line citation followed by the math.
Counter: Hinojos directly forecloses this argument. Interest accrues on the underpaid portion from the original deadline through the appraisal payment date.
The "we paid what we owed at the time" argument.
Carrier claims its pre-appraisal payment was reasonable based on the information then available, so no breach of §542.058 occurred. This conflates *reasonableness of investigation* with *timeliness of payment* — they are different statutory issues.
Counter: §542.058 is a strict deadline statute. The fact that the appraisal panel found a higher number is itself evidence that the original payment was an underpayment. Reasonable belief is not a defense to the deadline.
The limitations argument.
Carrier asserts the policyholder slept on rights or that the claim is now stale. Often deployed when the appraisal itself took a year or longer.
Counter: §542.060 interest accrues continuously from the deadline breach until payment. The cause of action for the unpaid interest typically remains live within the contract limitations period (usually 2-4 years), and the appraisal payment date is a clean accrual point for the interest claim.
The investigation extension argument.
Carrier produces correspondence claiming it properly extended the §542.058 deadline due to the complexity of the loss or the need for further inspection.
Counter: §542.059 extensions must be in writing, must state a reasonable cause, and don't operate as a blanket toll. Extensions don't run forever, don't apply to amounts the carrier already had reason to pay, and don't survive the carrier's own decision to issue a partial payment.
The documentation-completeness argument.
Carrier argues it never received "all items, statements, and forms reasonably requested," so the §542.058 clock never started. This is the most common defense and the one that requires the most careful claim-file analysis.
Counter: Barbara Technologies rejected the rule that the carrier controls the trigger by perpetually requesting documents. The clock starts when the carrier had what it reasonably needed — a question of fact that turns on the documents actually requested versus what was already on file. Timeline forensics work tells the story.
What this looks like in dollars.
A typical post-appraisal interest scenario. Numbers are illustrative, calculation method is exactly what the calculator runs.
$176,000 underpayment, 14 months delayed.
| Date of loss (hail) | March 15, 2024 |
| Claim reported | March 22, 2024 |
| §542.058 day-61 trigger date | May 21, 2024 |
| Carrier's initial payment | $48,000 |
| Appraisal award (binding) | $224,000 |
| Carrier's appraisal payment date | July 18, 2025 |
| Underpaid amount | $176,000 |
| Days delayed (May 21, 2024 → July 18, 2025) | 423 |
| Penalty rate (§542A floating, weather) | 11.75% / yr |
| Per-day accrual on underpaid amount | $56.66 |
| Statutory interest still owed | $23,966 |
The carrier paid the $176,000 owed on the appraisal. They will not voluntarily pay the $23,966 in interest unless someone makes them. On a standard 18% claim with the same fact pattern, the interest figure climbs to roughly $36,700.
That dollar amount is what most policyholders leave on the table — quietly, invisibly, after a "win" at appraisal. Hinojos makes it collectible. The calculation makes it concrete. A formal demand makes it real.
Three steps to recover what's still owed.
Most post-appraisal interest demands resolve without litigation once the timeline and math are presented. The carrier's risk is asymmetric: refuse, and they're staring at the interest plus attorney's fees under §542.060.
Send us the file
Claim file, payment history, appraisal award, all carrier correspondence. We rebuild the timeline against §542.055–.058 deadlines and identify the trigger date.
We calculate and demand
Formal written demand to the carrier with the timeline, the underpayment, the daily accrual, and the citation to Hinojos. Most carriers settle here. The math doesn't move; their position has to.
If they refuse, escalate
Continued refusal is a §542.060 violation that adds attorney's fees on top of the interest. We coordinate with experienced Texas insurance recovery counsel when litigation becomes necessary.
What policyholders actually ask.
Yes. Under Hinojos v. State Farm Lloyds, 619 S.W.3d 651 (Tex. 2021), payment of an appraisal award does not extinguish §542.060 statutory interest on the underpaid portion. Interest continues to accrue from the original payment deadline through the date the appraisal award is actually paid in full. The principle has been settled Texas Supreme Court law since 2021.
Hinojos is a 2021 Texas Supreme Court decision holding that an insurance carrier's payment of an appraisal award does not, by itself, satisfy or extinguish liability under Texas Insurance Code §542.060. If the carrier's pre-appraisal payment was less than the appraisal award, the carrier is liable for prompt-payment interest on the difference, accruing from the date payment was originally required. The case sits alongside Barbara Technologies (2019) and Ortiz (2019) as the trio of Texas Supreme Court appraisal/§542 decisions that reshape carrier exposure.
Interest is calculated on the underpaid portion (appraisal award minus pre-appraisal payment), at 18% per year for standard claims under §542.060(a) or at the §542A floating rate for weather claims with date of loss after September 1, 2017 (currently 11.75%). Interest accrues daily from the date the carrier was originally required to pay through the date the appraisal award was actually paid. Our calculator runs the math automatically once you supply the trigger date and the underpayment amount.
Carriers routinely refuse §542.060 interest after appraisal — it is one of the most commonly contested issues post-Hinojos. A formal written demand presenting the timeline, the underpayment math, and the daily accrual is often enough to resolve the dispute. If the carrier still refuses, §542.060 also entitles the policyholder to reasonable attorney's fees, which substantially raises the cost of further refusal. Continued refusal is itself an additional §542 breach.
Yes. The Hinojos rationale applies to both standard §542.060(a) claims and §542A weather claims. The applicable rate differs — 18% standard versus the §304.003 floating rate plus 5% for weather claims — but the principle is the same: the carrier owes interest on the underpaid portion from the date payment was required through the date of full payment, regardless of whether the loss was caused by an Act of God.
Maybe not. Texas insurance contract claims generally have a four-year statute of limitations under Tex. Civ. Prac. & Rem. Code §16.051, and many policies have shorter contractual limitation periods (often two years). The cause of action for unpaid §542.060 interest typically accrues at the time the carrier breached — but the limitations analysis is fact-specific and depends on the trigger date, the appraisal payment date, and policy language. Send us the file. The review is free and we'll tell you whether the limitations door is still open.
Six items make the review fast: (1) the policy declarations page; (2) the carrier's claim notes or claim file (often obtainable through subpoena or discovery if you don't have it); (3) all carrier correspondence and email; (4) every payment letter or check stub from the carrier; (5) the appraisal demand, appointment letters, and final award; (6) any §542A pre-suit notice if your loss was weather-related and post-9/1/2017. We can work with less, but the more we have, the cleaner the timeline analysis.