Dallas Mold Damage Guide – Texas Property Insurance Law

Estimated reading time: 12 min read

Introduction: Why Dallas Homeowners Must Know Their Rights

Dallas, Texas routinely appears on lists of the most weather-volatile metropolitan areas in the United States. From spring hail and tornado outbreaks to late-summer tropical rain bands and sudden winter freezes, North Texas homes are under constant threat of leaks, floods, and the mold growth that inevitably follows excess moisture. Unfortunately, insurers do not always treat mold damage—or the hidden water intrusion that causes it—with the urgency and fairness homeowners deserve. Delays, partial payments, and outright denials are common.

This comprehensive legal guide—written with a policyholder-first perspective—explains precisely how Texas property insurance law protects Dallas residents. You will learn:

• Key provisions of the Texas Insurance Code and Prompt Payment of Claims Act;

• Common dispute scenarios, including mold, wind/hail, water, and fire losses;

• Statutory deadlines, appraisal rights, and bad-faith penalties;

• Step-by-step actions to preserve your claim and maximize recovery;

• When to involve an experienced dallas insurance attorney such as Louis Law Group.

Legal disclaimer: The information below is general in nature and is not, nor is it intended to be, legal advice. Consult a qualified attorney licensed in Texas for advice regarding your individual situation.

Understanding Texas Property Insurance Law

Texas Insurance Code Chapters 541 & 542

The Texas Legislature codified robust consumer protections for policyholders. Two chapters are particularly important:

• Chapter 541 – Unfair Methods of Competition and Unfair or Deceptive Acts or Practices: This section allows homeowners to sue insurers for engaging in bad-faith or deceptive settlement practices (e.g., misrepresenting policy language or undervaluing covered losses). Successful plaintiffs may recover actual damages, additional damages up to three times the amount if the conduct was committed knowingly, and attorneys’ fees.

• Chapter 542 – Prompt Payment of Claims Act (PPCA): Also known as the "Texas Prompt Payment Act," this law imposes strict deadlines on insurers. They must acknowledge a claim within 15 calendar days (30 days during a catastrophe as defined by the Texas Department of Insurance) and accept or deny coverage within 15 business days after receiving all requested documentation. Failure to comply triggers an automatic statutory interest penalty of 18% per year plus reasonable attorneys’ fees.

For the full statutory language, visit the Texas Insurance Code.

Policy Contract Limitations vs. State Statute of Limitations

Texas generally provides a four-year statute of limitations for breach-of-contract lawsuits. However, most property insurance policies shorten that period to two years from the date of loss—or sometimes two years and one day. Courts have repeatedly upheld these contractual limitation provisions so long as they are clearly written. Missing the contractual deadline can bar your claim entirely, so mark your calendar immediately after a loss.

Bad-Faith Common-Law Protections

Beyond statutory remedies, Texas recognizes a common-law duty of good faith and fair dealing (from cases such as Arnold v. National County Mutual, 725 S.W.2d 165 (Tex. 1987)). If an insurer unreasonably delays or denies payment when liability is reasonably clear, the policyholder can seek extra-contractual damages for mental anguish and punitive damages.

Common Property Insurance Disputes in Dallas

Mold Damage Claims

Mold thrives in the warm, humid climate that often follows Dallas rainstorms. Because remediation costs skyrocketed in the 1990s, insurers responded by narrowing mold coverage. Many current Texas policies cover mold only if it results from a covered peril, such as a sudden pipe burst. Disputes arise when insurers argue that moisture was "ongoing" or due to "maintenance" issues—policy exclusions that shift cost back to the homeowner.

• Tip: Obtain a licensed hygienist report linking mold to a specific water event within the policy period.

Wind and Hail Damage

Texas leads the nation in hail losses. Roof damage may not leak immediately, allowing insurers to claim "old damage" or "wear and tear." A public adjuster or engineer can help date the hail impact by reviewing shingle bruising and meteorological data.

Water Damage & Frozen Pipe Claims

February 2021’s Winter Storm Uri taught Texans that even a mild climate is not immune to catastrophic freezes. Burst supply lines cause hidden structural moisture that fosters mold. Insurers frequently underestimate dry-out costs or deny claims under the "continuous seepage" exclusion.

Fire and Smoke Losses

While fire coverage is typically broad, smoke and soot remediation, temporary housing, and code-upgrade costs remain contentious.

Scope of Repair Disputes

Even when coverage is accepted, carriers often dispute the scope and price of repairs. For example, replacing a few shingles instead of full roof replacement, or "spot treating" mold rather than removing contaminated drywall.

Texas Legal Protections & Regulations

Prompt Payment Deadlines Cheat Sheet

• 15 calendar days to acknowledge claim (TIC §542.055)

• 15 business days to accept/deny after documentation (TIC §542.056)

• 5 additional business days to pay once liability is accepted (TIC §542.057)

• Penalty: 18% annual interest + attorneys’ fees (TIC §542.060)

Appraisal Clause – Your Right to Independent Valuation

Most Texas property policies include an appraisal provision allowing either party to demand a neutral panel when the only dispute is the amount of loss. Key points:

• Either side may invoke in writing—there is no statutory deadline, but policies usually require it "within a reasonable time." Courts have found delays over one year unreasonable.

• Each party selects a competent, impartial appraiser within 15–20 days.

• The two appraisers then choose an umpire. An agreement signed by any two of the three binds the parties.

• Appraisal awards are difficult to overturn unless fraud, bias, or procedural irregularity is shown.

Even after appraisal, homeowners may still pursue bad-faith claims if the carrier acted unfairly before the process.

Recent Texas Court Decisions Affecting Policyholders

• Ortiz v. State Farm Lloyds (Tex. 2020): Held that an insured cannot recover for alleged underpayment without independent injury after full payment of an appraisal award. However, statutory interest under PPCA may still be available.

• Barbara Technologies Corp. v. State Farm Lloyds (Tex. 2019): Clarified that payment after appraisal does not automatically bar PPCA claims; timeliness matters.

Texas Department of Insurance Oversight

The Texas Department of Insurance (TDI) regulates insurer market conduct rules, investigates consumer complaints, and enforces administrative penalties for violations.

Step-by-Step Actions After a Property Insurance Dispute

1. Document Everything Immediately

• Photograph/video the damage in good lighting. Capture wide shots, close-ups, and serial numbers of damaged appliances.

• Keep a claim diary—dates, names, and summaries of every call or email with the insurer, adjusters, or contractors.

• Save receipts for emergency repairs, hotel stays, meals, and mold remediation.

2. Mitigate Further Damage

Your policy imposes a duty to prevent additional loss. In mold cases, that means:

• Shutting off water sources;

• Running dehumidifiers;

• Hiring an IICRC-certified remediation company for dry-out.

Failure to mitigate may give insurers grounds to reduce payment.

3. Obtain Independent Estimates

Carrier adjusters often use price-depressing software. Secure at least two independent contractor bids. For mold, ask for a line-item protocol and post-remediation verification (PRV) testing costs.

4. Review the Policy Carefully

Look for exclusions ("repeated seepage"), sub-limits (mold often capped at $5,000–$10,000), and endorsement buy-backs. A seasoned Texas property damage claims lawyer can translate dense language.

5. File a Formal Written Complaint to TDI

If negotiations stall, file online with TDI. Provide claim numbers, correspondence, and evidence. While TDI cannot order payment, its inquiry alone persuades many insurers to settle.

6. Preserve Appraisal Rights

Send a written demand via certified mail if you dispute the amount. Keep proof of delivery.

7. Track Deadlines

Use the prompt payment timeline above and calendar the contractual two-year suit limitation. Missing dates can extinguish rights.

When to Seek Legal Help in Texas

Not every claim requires an attorney, but you should strongly consider one if:

• The insurer denies coverage citing exclusions you believe do not apply.

• Your mold remediation contractor says the carrier’s scope is inadequate to pass clearance.

• Delays exceed statutory deadlines and you accrue out-of-pocket costs.

• Appraisal has been invoked and you need a competent appraiser or umpire.

• You receive a lowball offer contingent upon a broad release of bad-faith claims.

Louis Law Group leverages years of experience battling carriers under both Chapters 541 and 542. Our attorneys are fully licensed in Texas and have handled hundreds of homeowner insurance dispute Texas cases, including high-stakes mold and water losses. We advance litigation costs and work on a contingency fee—meaning no attorney fee unless we recover for you.

Local Resources & Next Steps

Government and Courts

Dallas County Civil District Courts – for lawsuits exceeding $200,000. Dallas Bar Association – lawyer referral service. TexasLawHelp.org – free legal aid resources.

Weather & Mold Prevention Tips Specific to Dallas

Because of Dallas’ alternating wet-dry climate, periodically inspect attics and crawlspaces after heavy thunderstorms or hail. Install smart leak detectors and schedule annual roof inspections to document pre-loss condition—evidence that can later counter insurer arguments of "prior damage."

Call to Action

If your property insurance claim has been delayed, underpaid, or denied—especially for mold damage—call Louis Law Group today at 833-657-4812 for a free case evaluation and policy review. We stand up to insurers so Dallas homeowners can rebuild without financial stress.

© 2024 Louis Law Group. This article is for informational purposes only and does not create an attorney-client relationship.