Texas statutory interest calculator
Calculate the prompt-payment interest a Texas insurer owes on a late-paid claim — with partial payments, supplements, the 18% or floating rate, and a memo you can print or share.
How the Texas statutory interest calculator works
Texas Insurance Code §542.060 makes an insurer that is liable for a claim, and that did not comply with the prompt-payment subchapter, pay the policyholder interest on the amount of the claim “as damages,” together with reasonable and necessary attorney’s fees. This calculator does the interest part of that sentence:
interest = late amount × annual rate ÷ 365 × days late
Simple interest, accruing daily
It works on components. The original claim is one component; each supplement or separately submitted item is another, because each one has its own payment deadline. For every component it starts on the date payment was required, subtracts anything paid on or before that date, and then charges interest on the remaining balance until each later payment reduces it. If a balance is still unpaid, it accrues through the date you choose.
Choosing the rate
- 18% a year — §542.060(a). Applies to non-weather claims (fire, smoke, plumbing leaks, theft, vandalism) and to weather claims made before September 1, 2017.
- Floating rate — §542.060(c). In an action governed by Chapter 542A, the rate is the Finance Code §304.003 judgment rate plus 5%. Chapter 542A covers claims for damage caused wholly or partly by forces of nature, and the 2017 law that created it (HB 1774) applies the new rate to claims made on or after September 1, 2017. The November 2026 §304.003 rate is 7.00%, so the floating rate is 12.00%. Because §304.003 is floored at 5% and capped at 15%, the floating rate is always between 10% and 20%.
The old site and many online summaries say the floating rate turns on the date of loss. The bill text says otherwise: Section 4(b) of HB 1774 applies §542.060(c) “only to a claim … made on or after” September 1, 2017. For nearly every claim today the answer is the same, but for a 2017 storm reported late it can change the rate.
Finding the deadline
The date payment was required depends on which part of Chapter 542 the insurer missed:
| Provision | Deadline | Measured from |
|---|---|---|
| §542.057(a) | 5 business days (20 for surplus lines) | Notice that the insurer will pay all or part of the claim |
| §542.057(b) | 5 business days | Performance of an act the payment was conditioned on |
| §542.058(a) | 60 days (unless another statute sets a period) | Receipt of all items, statements and forms reasonably requested |
| §542.059(b) | +15 days to each claim-handling deadline | A weather catastrophe or major natural disaster declared by the commissioner |
If you aren’t sure, use the claim deadline calculator first, then bring the result back here.
What the calculator does not decide
- Whether the insurer is liable for the claim. §542.060 applies only if it is. If arbitration or litigation finds a claim invalid, §542.058(a) does not apply (§542.058(b)).
- Whether a document request was reasonable. The 60-day clock runs from receipt of items the insurer reasonably requested; whether a request qualified is a fact question.
- Attorney’s fees and prejudgment interest. Both can be awarded in addition to §542.060 interest in a lawsuit; see the prejudgment interest calculator.
Payments are applied to the claim balance, not to accrued interest first. That is the conservative approach and the one most demand letters use; a court could allocate differently.
Questions about this tool
Is Texas prompt-payment interest simple or compound?
Simple. §542.060(c) says “simple interest” outright, and the 18% in §542.060(a) is likewise calculated as simple annual interest on the unpaid amount.
Do partial payments stop the interest?
No. A payment reduces the balance the interest runs on from the date it is made. Interest continues on whatever remains unpaid. The Texas Supreme Court made this point in Hinojos v. State Farm Lloyds (2021): a reasonable partial payment made on time does not shield the insurer from interest on amounts it owed but had not paid when the deadline expired.
Why does the calculator divide by 365?
An annual rate applied daily is conventionally divided by 365. In a leap year the difference is a fraction of a percent of the interest.
Can I use this for a commercial property claim?
Yes. Subchapter B of Chapter 542 applies to first-party claims under most insurance policies, residential or commercial. It does not apply to workers’ compensation, mortgage guaranty, title insurance, fidelity, surety or guaranty bonds, or marine insurance (§542.053).
Is the result a legal opinion?
No. It is an estimate from the dates and amounts you enter. Enforce Interest is a public adjusting service, not a law firm.
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