State guide · Southwest
Texas subrogation law guide
A claimant whose percentage of responsibility is greater than 50% recovers nothing; at 50% or less, damages are reduced by the claimant's share. Defendants can designate responsible third parties to spread fault.
Texas at a glanceTX
- Property damage
- 2 years
- Bodily injury
- 2 years
- Fault rule
- Modified, 51% bar
- Gov. notice
- 180 days
Overview
Texas runs property damage and bodily injury on the same two-year clock under Tex. Civ. Prac. & Rem. Code 16.003, which makes it one of the tightest property subrogation states in the country. Fault is governed by Chapter 33 proportionate responsibility: a claimant more than 50% responsible recovers nothing, and a defendant is jointly and severally liable only if its own share exceeds 50%. Defendants can designate responsible third parties under 33.004 to dilute their share, so a recovery file needs its own account of every actor's role. Claims against governmental units run through the Texas Tort Claims Act, which waives immunity for property damage only when it arises from the use of a motor-driven vehicle or equipment, caps property damage at $100,000 per occurrence, and requires notice within six months under 101.101, or sooner where a city charter sets a shorter period. Texas recognizes the made-whole doctrine for equitable subrogation, but Fortis Benefits v. Cantu lets clear policy language override it. PIP subrogation is barred by statute except against uninsured drivers, and product claims face a 15-year repose period. Speed of identification matters more in Texas than almost anywhere else.
Quick reference with citations
- Property damage SOL
- 2 years
- Tex. Civ. Prac. & Rem. Code 16.003(a) (injury to the estate or to the property of another)
- Bodily injury SOL
- 2 years
- Tex. Civ. Prac. & Rem. Code 16.003(a)
- Product liability
- 2 years from injury (Tex. Civ. Prac. & Rem. Code 16.003); 15-year statute of repose running from the date of sale by the defendant (16.012(b)), longer where the manufacturer expressly warranted a longer useful safe life, with a latent disease exception (16.012(d)).
- Written contract
- 4 years
- Contract and indemnity recoveries
- Comparative fault rule
- Modified, 51% bar
- Tex. Civ. Prac. & Rem. Code 33.001 to 33.017 (proportionate responsibility)
- Government notice of claim
- 180 days
- Texas Tort Claims Act: the governmental unit must receive written notice within 6 months after the incident (Tex. Civ. Prac. & Rem. Code 101.101(a)), or within any shorter period a city charter or ordinance sets, which 101.101(b) ratifies; Houston's charter requires 90 days. Actual notice of the damage excuses formal notice (101.101(c)), and notice requirements are jurisdictional (Tex. Gov't Code 311.034). Immunity is waived for property damage only when it arises from an employee's use of a motor-driven vehicle or equipment (101.021), capped at $100,000 per occurrence (101.023).
Fault rule in practice
How Texas's rule changes a $50,000 recovery.
A claimant whose percentage of responsibility is greater than 50% recovers nothing; at 50% or less, damages are reduced by the claimant's share. Defendants can designate responsible third parties to spread fault.
Authority: Tex. Civ. Prac. & Rem. Code 33.001 to 33.017 (proportionate responsibility)
| Insured's share of fault | Recoverable in TX | Under pure comparative |
|---|---|---|
| 0% | $50,000 | $50,000 |
| 20% | $40,000 | $40,000 |
| 50% | $25,000 | $25,000 |
| 60% | Barred | $20,000 |
Doctrines that move the number
Texas doctrine checklist.
Made-whole doctrine
Ortiz v. Great Southern Fire & Casualty Insurance Co., 597 S.W.2d 342 (Tex. 1980) recognizes the made-whole doctrine for equitable subrogation, and requires proof of what part of a settlement compensates the loss the insurer paid. Fortis Benefits v. Cantu holds that the doctrine does not override clear contractual subrogation language, so policy wording controls most disputes. Federal courts applying Texas law have declined to adopt Wisconsin's strict rule barring all subrogation until the insured is fully compensated.
Economic loss doctrine
Texas applies the economic loss rule to product failures that damage only the product and to purely economic losses from contract performance (LAN/STV v. Martin K. Eby Construction Co., 435 S.W.3d 234 (Tex. 2014); Sharyland Water Supply Corp. v. City of Alton, 354 S.W.3d 407 (Tex. 2011)). The rule does not bar negligence claims for physical damage to other property, which is why water loss recoveries against plumbers and contractors proceed in tort (Chapman Custom Homes, Inc. v. Dallas Plumbing Co., 445 S.W.3d 716 (Tex. 2014)).
Joint and several liability
Each defendant is liable only for its own percentage unless its responsibility is greater than 50%, in which case it is jointly and severally liable (Tex. Civ. Prac. & Rem. Code 33.013), with exceptions for listed criminal conduct. Settlement credits are dollar for dollar (33.012), and defendants may designate responsible third parties by motion filed at least 60 days before trial (33.004).
Anti-subrogation and waiver
An insurer cannot subrogate against its own insured. Texas Insurance Code chapter 151 limits broad-form indemnity and additional insured requirements in most construction contracts entered into on or after January 1, 2012, so contractor recoveries often turn on direct negligence rather than contract indemnity. Tex. Ins. Code 1952.155 bars PIP subrogation except against an uninsured driver.
Practice notes
Working Texas subrogation files.
- 1
The two-year period in 16.003 covers property damage as well as bodily injury, so a water loss closed at month 14 leaves under a year to identify the plumber, send a demand and file suit. Contract-based indemnity claims run four years under 16.004 and 16.051 and generally accrue when the indemnitee's liability becomes fixed. Calendar the tort deadline from the date of loss, not the date of payment.
- 2
Chapter 33 reduces recovery by the claimant's percentage and bars it above 50%. On a $50,000 kitchen fire started by a contractor's torch work, a 20% share assigned to the insured for stored solvents leaves $40,000; at 50% the insured still recovers $25,000; at 51% the claim is gone. Expect the defense to designate responsible third parties under 33.004, which can shift percentages without adding a payer, so document every actor early.
- 3
Before sending notice to a Texas city, read its charter. Section 101.101(b) ratifies shorter charter periods, and Houston's charter requires notice within 90 days. Notice requirements are jurisdictional under Tex. Gov't Code 311.034. The Tort Claims Act waives immunity for property damage only when it arises from an employee's use of a motor-driven vehicle or equipment, so a water main break or pothole claim usually fails on immunity, not on fault.
- 4
Texas is a tort state with optional PIP, and Tex. Ins. Code 1952.155 bars subrogation for PIP payments except against a driver without the financial responsibility required by Transportation Code chapter 601. Collision, rental and property damage recoveries are unaffected. Separate PIP dollars from collision dollars in the demand so the adverse carrier cannot use the PIP bar to stall the whole claim.
- 5
Fortis Benefits v. Cantu holds that unambiguous policy language controls over the made-whole doctrine, so the policy wording decides most Texas priority disputes. Under Ortiz, when a settlement does not allocate between insured and uninsured losses, the party claiming a share must show what portion compensates the loss it paid. Keep the proof of loss and a covered versus uncovered damages schedule in the file.
- 6
Ishqkala's SOL Tracking Engine escalates Texas property files at day 365 instead of waiting for a standard 18-month review, because the two-year clock leaves little room for contractor identification and suit. Where the loss narrative names a city vehicle, utility truck or transit bus, it opens a separate notice task keyed to the six-month statutory period and prompts a reviewer to check the city charter for a shorter one.
Key cases
Fortis Benefits v. Cantu
234 S.W.3d 642 (Tex. 2007)
The equitable made-whole doctrine does not override an unambiguous contractual subrogation or reimbursement provision. In Texas, the policy language decides priority between insurer and insured.
Mid-Continent Insurance Co. v. Liberty Mutual Insurance Co.
236 S.W.3d 765 (Tex. 2007)
A co-primary insurer that paid more than its pro rata share of a settlement could not recover the excess from the underpaying co-insurer through contribution or subrogation, because the fully protected insured had no claim of its own to pass along. Recovery rights between carriers on a shared insured are narrow.
Chapman Custom Homes, Inc. v. Dallas Plumbing Co.
445 S.W.3d 716 (Tex. 2014)
The economic loss rule does not bar a property owner's negligence claim against a plumbing subcontractor for water damage to other parts of the house. Water loss subrogation against trades can proceed in tort without contract privity.
Inter-company arbitration
Texas carriers resolve a large share of auto subrogation through Arbitration Forums, and arbitrators apply Chapter 33 percentages because decisions rest on the law of the loss state. A finding above 50% against the applicant produces no award, while a 50/50 split still pays half. With only two years to work with, file before the limitation period runs, since the responding company can raise an expired statute as a defense. Compulsory jurisdiction for signatories covers company-paid damages up to $100,000.
How Ishqkala applies this guide
TX rules, built into every score.
- Opportunities with a Texas loss state are calendared against the 2 years property damage period or the 2 years bodily injury period, whichever controls the claim type.
- The insured's estimated fault share is applied under modified, 51% bar before recoverable dollars are scored.
- Files involving a public entity get a 180-day notice deadline that outranks the general SOL in the priority queue.
- Alerts fire at 180, 90, 45 and 15 days before the controlling deadline.
FAQ
Texas subrogation FAQ
2 years (Tex. Civ. Prac. & Rem. Code 16.003(a) (injury to the estate or to the property of another)). A subrogating carrier generally takes the insured's claim subject to the same limitation period, usually measured from the date of loss.
Modified, 51% bar (Tex. Civ. Prac. & Rem. Code 33.001 to 33.017 (proportionate responsibility)). A claimant whose percentage of responsibility is greater than 50% recovers nothing; at 50% or less, damages are reduced by the claimant's share. Defendants can designate responsible third parties to spread fault.
Texas Tort Claims Act: the governmental unit must receive written notice within 6 months after the incident (Tex. Civ. Prac. & Rem. Code 101.101(a)), or within any shorter period a city charter or ordinance sets, which 101.101(b) ratifies; Houston's charter requires 90 days. Actual notice of the damage excuses formal notice (101.101(c)), and notice requirements are jurisdictional (Tex. Gov't Code 311.034). Immunity is waived for property damage only when it arises from an employee's use of a motor-driven vehicle or equipment (101.021), capped at $100,000 per occurrence (101.023).
Ortiz v. Great Southern Fire & Casualty Insurance Co., 597 S.W.2d 342 (Tex. 1980) recognizes the made-whole doctrine for equitable subrogation, and requires proof of what part of a settlement compensates the loss the insurer paid. Fortis Benefits v. Cantu holds that the doctrine does not override clear contractual subrogation language, so policy wording controls most disputes. Federal courts applying Texas law have declined to adopt Wisconsin's strict rule barring all subrogation until the insured is fully compensated.
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