Guide to Property Insurance Rights in Houston, Texas

Introduction: Why Houston Homeowners Need to Understand Property Insurance Denials

Houston, Texas regularly experiences hurricanes from the Gulf, spring hailstorms sweeping down the I-10 corridor, and severe thunderstorms that can drench the Bayou City in minutes. According to the National Oceanic and Atmospheric Administration (NOAA), Harris County has sustained more than a dozen federally declared weather disasters in the last decade. With that backdrop, most Houston homeowners carry property insurance expecting timely payment when wind, water, or fire damages their homes. Unfortunately, policyholders are often surprised when an insurer delays, underpays, or outright denies a claim.

This comprehensive legal guide explains how Texas law protects you, what to do after receiving a claim denial, and when to involve a Texas attorney to enforce your rights. While we emphasize policyholder protections, all information is strictly based on verifiable statutes, regulations, and Texas court decisions.

Understanding Your Property Insurance Rights in Texas

Key Policyholder Rights Under Texas Law

• Prompt Payment of Claims Act (Texas Insurance Code Chapter 542): Requires carriers to acknowledge, investigate, and pay or deny claims within statutory deadlines—generally 15 days to acknowledge, 15 business days to accept or reject after receiving all required information, and 5 business days to pay once liability is accepted.
• Unfair Claim Settlement Practices (Texas Insurance Code §541.060): Prohibits misrepresenting policy provisions, failing to attempt in good faith to settle, or compelling insureds to sue to recover adequate amounts.
• Right to Independent Appraisal (Standard Texas HO-A & HO-B policies): Either party may invoke appraisal to resolve a dispute over amount of loss, even after a denial on valuation grounds.
• Right to Notice of Reasons for Denial: Texas Insurance Code §542.056(c) entitles homeowners to a written statement of the specific policy language relied upon for denial.

Statute of Limitations in Texas

Most property insurance lawsuits must be filed within two years from the date the insurer breached the policy (Texas Insurance Code §541.162). Some policies shorten this period contractually to one year; Texas appellate courts generally enforce such provisions. Always review your declarations page and policy conditions closely.

Attorney Licensing in Texas

Only attorneys licensed by the State Bar of Texas may represent homeowners in court or provide legal advice on Texas insurance disputes. Public adjusters may estimate damages but cannot practice law.## Common Reasons Property Insurance Companies Deny Claims in Texas

• Excluded Perils – Damage caused by flooding or surface water is excluded under standard homeowners forms; a separate National Flood Insurance Program (NFIP) policy is required.
• Wear and Tear Allegations – Insurers often assert hail or wind damage was due to age-related deterioration rather than a covered “sudden and accidental” event. Texas Supreme Court precedent (Great Am. Ins. Co. v. Langdeau) allows carriers to deny for pre-existing conditions, but they carry the burden of proof.
• Late Notice – Policies require “prompt” notice. However, in Texas an insurer must show it was prejudiced by late notice to avoid payment (PAJ, Inc. v. Hanover, 243 S.W.3d 630, Tex. 2008).
• Misrepresentation or Fraud – Material misstatements may void coverage under Texas Insurance Code §705.004, but the carrier must prove intent to deceive.
• Disputed Causation – When multiple causes (e.g., wind and previous construction defects) combine, insurers invoke the “concurrent causation” doctrine. Texas courts (e.g., JAW The Pointe v. Lexington, 460 S.W.3d 597) require policyholders to segregate covered from non-covered damage.

Texas Legal Protections & Insurance Regulations

Prompt Payment Penalties

If an insurer violates Chapter 542 deadlines, it owes statutory interest (currently 18% per annum) plus reasonable attorney’s fees. This strong deterrent often motivates quicker settlements.

Separation of Claims for Certain Catastrophes

After Hurricane Harvey, the Texas Legislature enacted House Bill 1774 (now Texas Insurance Code Chapter 542A) applying to “forces of nature” claims, including hurricanes, hail, wind, and tornadoes. Key provisions:

• Pre-Suit Notice: 60 days’ written notice before filing suit, stating the amount in dispute and attorney fee calculation.
• Liability Apportionment: If an adjuster is sued, the carrier may elect to assume their liability, potentially removing the case to federal court.
• Attorney Fee Retention: Fees may be reduced if the ultimate judgment is less than 80% of the pre-suit demand (designed to discourage inflated claims).

Texas Department of Insurance (TDI) Oversight

The Texas Department of Insurance licenses carriers, reviews rates, and investigates consumer complaints. Under Texas Insurance Code §521.051, TDI can levy administrative penalties or revoke certificates of authority for unfair claims handling.## Steps to Take After a Property Insurance Claim Denial in Texas

1. Review the Denial Letter and Policy

Compare the carrier’s cited policy language with your declarations page, endorsements, and exclusions. Verify whether the denial revolves around coverage (peril excluded) or amount (valuation dispute).

2. Gather Evidence

• Photographs/videos immediately after the event.
• Repair invoices, weather reports (NOAA or Storm Prediction Center), and witness statements.
• Independent estimates from licensed Houston contractors or public adjusters.

3. Invoke the Appraisal Clause (If Appropriate)

File a written appraisal demand following policy procedures. Each party selects an appraiser; the appraisers pick an umpire. The panel’s award is binding on the amount of loss but not on coverage determinations.

4. File a Complaint with TDI

You can submit complaints online or by mail. TDI will contact the insurer for a detailed response, often prompting reconsideration. See TDI’s Consumer Help Line: 1-800-252-3439.

5. Send a Chapter 542A Pre-Suit Notice (for weather-related claims)

This notice must include:

• a statement of the acts giving rise to the claim,
• the specific dollar amount of economic damage and attorney’s fees, and
• photographs or estimates supporting the claim.

6. Consult a Texas Attorney

An experienced lawyer can evaluate bad-faith exposure, calculate interest penalties, and ensure statutory notice is compliant. Many firms, including contingency-fee practices, advance litigation costs.

When to Seek Legal Help in Texas

Indicators You Need Counsel

• The insurer refuses to participate in appraisal or ignores TDI inquiries.
• Evidence suggests systemic undervaluation (e.g., identical roof claims in your subdivision all underpaid).
• Deadlines under the statute of limitations are approaching (one year in many surplus-lines policies).

Finding a Qualified Lawyer

Verify licensure through the State Bar of Texas “Find a Lawyer” portal. Look for attorneys with trial experience under Chapter 542 and 542A, and familiarity with Harris County District Courts’ local rules.

Local Resources & Next Steps

Houston-Specific Risk Factors

• Hail Alley: The Insurance Institute for Business & Home Safety ranks the Houston metro among top U.S. areas for hail frequency.
• Building Code Upgrades: The City of Houston follows the 2021 International Residential Code with windstorm amendments. Upgrades after a loss may be covered under “ordinance or law” endorsements—check your policy.
• Floodplain Management: Homes in Harris County Flood Control District zones often require separate flood policies. Don’t let an insurer mislabel wind-driven rain as flood water.

Non-Profit & Government Assistance

Houston Habitat for Humanity offers post-disaster repair programs for low-income homeowners.ReadyHarris provides up-to-date emergency alerts and recovery resources.

Checklist for Houston Homeowners Facing Denial

• Document: Photograph all damage before cleanup.
• Timeline: Log every call, email, and letter exchanged with the adjuster.
• Mitigate: Make reasonable temporary repairs (tarps, dehumidifiers) and keep receipts; Texas law requires mitigation.
• Seek Appraisal or Counsel: Don’t wait until the statute of limitations lapses.

Legal Disclaimer: This guide is provided for informational purposes only and does not constitute legal advice. Laws change and individual facts matter. Consult a licensed Texas attorney regarding your specific situation.

If your property insurance claim was denied, call Louis Law Group at 833-657-4812 for a free case evaluation and policy review.