Statute of Limitations for an Insurer’s Breach of the Duty of Good Faith and Fair Dealing

If my insurance company cancelled my insurance policy without a reasonable basis or denied payment of a claim when it was required to pay, is there a limited time within which I have to file a lawsuit against the insurance company?

Yes.  Claims against an insurer for breach of the duty of good faith and fair dealing must be brought not later than two years from the date the claim accrued.  See Tex. Civ. Prac. & Rem. Code § 16.003(a); Murray v. San Jacinto Agency, Inc., 800 S.W.2d 826, 827 (Tex. 1990).  The “accrual date” (the date when the two year limitations period begins to run) is the day the insurer wrongfully denied coverage.  See Murray, 800 S.W.2d at 828.  The fact that damage may continue to occur for a period after the denial date does not prevent the statute of limitations from starting to run.  Id.  However, if the insurance company “strings the insured along” without denying or paying the claim, then the accrual date may be tolled.  See, e.g., Murray, 800 S.W.2d at 829 n.2.