Houston Guide to Texas Property Insurance Law for Mold Claims

Estimated read time: 13 min read

Introduction: Why Houston Homeowners Must Know Their Rights

Houston’s humid subtropical climate and frequent tropical storms create perfect conditions for mold growth inside homes and commercial properties. When water intrusion from hurricanes, burst pipes, or roof leaks goes untreated for even 24–48 hours, mold colonies can take hold in drywall, flooring, and HVAC systems. The cost of mold remediation often reaches tens of thousands of dollars—yet insurers routinely delay, underpay, or deny these claims. Understanding Texas property insurance law empowers policyholders to fight back, preserve evidence, and maximize recovery under their policies. This guide explains key Texas statutes, deadlines, and practical steps so Houston homeowners can respond effectively when their mold damage claim stalls.

Common Disputes Faced by Houston Policyholders

• Delayed payments despite the Texas Prompt Payment of Claims Act (Tex. Ins. Code ch. 542).

• Partial or lowball estimates that exclude mold remediation, air scrubbers, or build-back costs.

• Denials based on alleged maintenance issues or policy exclusions.

• Scope of repair disagreements over removing vs. encapsulating affected materials.

Because insurers hold substantial resources and claims expertise, retaining legal counsel early often levels the playing field for homeowners. Louis Law Group focuses on advocating for Houston policyholders when insurers refuse to honor valid mold claims.

Understanding Texas Property Insurance Law

The Texas Insurance Code Provisions That Matter Most

Chapter 542 – Prompt Payment of Claims Insurers must acknowledge a claim within 15 calendar days, request all necessary documents, and accept or reject the claim within 15 business days after receiving required information. Failing this deadline can trigger penalty interest (currently 18% per year) and attorney’s fees. Chapter 541 – Unfair Settlement Practices & Bad Faith Prohibits misrepresenting policy coverage, failing to attempt in good faith to effectuate a prompt and fair settlement, or refusing to pay without reasonable investigation. Successful plaintiffs may recover actual damages, mental anguish damages, treble damages for knowing violations, and attorney’s fees. Chapter 542A – Weather-Related Claims Notice Requires a 60-day pre-suit notice detailing the amount owed. While directed at wind and hail, many mold claims originate from severe weather events—making compliance critical.

Full statutory text is available through the Texas Insurance Code.

Contractual Appraisal Clauses

Most Texas property policies contain an appraisal provision allowing either party to demand a neutral umpire decide the amount of loss. Appraisal can be a powerful tool when the dispute centers on value rather than coverage—but deadlines vary by policy. Courts strictly enforce notice requirements, so consult an attorney before timelines lapse.

Statute of Limitations

• Contract claims: Four (4) years under Tex. Civ. Prac. & Rem. Code §16.004, unless the policy shortens the period (many reduce to two years).

• Bad faith & unfair practices: Two (2) years under Tex. Ins. Code §541.162.

• Always check your policy for suit limitation clauses. Courts uphold express two-year contractual limitations in most cases.

Common Property Insurance Disputes in Texas

1. Mold & Water Damage

Mold often follows water events like Hurricane Harvey, Tropical Storm Imelda, or the 2021 Winter Storm Uri. Insurers may argue:

• The mold was pre-existing or due to poor maintenance.

• Policy exclusions for “fungus” override coverage.

• Sub-limits (often $5,000–$10,000) cap payout.

Texas courts interpret exclusions narrowly; if water damage is covered, ensuing mold may be covered as a resulting loss. Always review anti-concurrent-causation language with counsel.

2. Wind & Hail

Gulf Coast storms produce high winds and debris that damage roofs, leading to leaks and later mold. Disputes arise over roof repair scope (patch vs. replacement) and depreciated vs. replacement cost values.

3. Fire & Smoke

Houston’s industrial corridor sees frequent fire claims. Disagreements often involve smoke odor remediation and code upgrades.

4. Hurricane & Flood Claims

Wind-driven rain may be covered, while rising water falls under separate flood policies. Insurers sometimes misclassify damage to avoid payment.

5. Plumbing Failures

Winter pipe bursts lead to widespread water damage and hidden mold behind walls. Timely moisture mapping and infrared imaging preserve evidence.

Texas Legal Protections & Regulations

Prompt Payment Penalties

If an insurer violates Chapter 542, penalty interest accrues from the date payment should have been made until it is actually paid. Policyholders also recover reasonable attorney’s fees, making litigation feasible when the amount in dispute is modest.

Bad Faith Damages

Under Chapter 541 and the common law, insurers acting with “no reasonable basis” may owe up to three times actual damages, plus exemplary damages in egregious cases. Recent Texas Supreme Court decisions (e.g., USAA Texas Lloyds v. Menchaca, 545 S.W.3d 479 (Tex. 2018)) clarify overlap between contract and extra-contractual remedies, but policyholders may still recover for independent injuries such as credit damage or mental anguish.

Appraisal Timelines

• Most policies require written demand.

• Each side selects an appraiser within 20 days.

• The two appraisers pick an umpire; if they cannot agree within 15 days, either party may request court appointment under Tex. Civ. Prac. & Rem. Code §152.007.

• Appraisal awards are binding on amount of loss but not on coverage.

Recent Case Law Impacting Mold Claims

• Griffin v. Union Insurance Co., No. 14-19-00430-CV (Tex. App. – Houston [14th Dist.] 2021): affirmed that appraisal does not bar bad faith claims when insurer’s delay preceded appraisal.

• Barbara Technologies Corp. v. State Farm Lloyds, 589 S.W.3d 806 (Tex. 2019): appraisal payment does not preclude prompt payment penalties.

These opinions reinforce policyholders’ leverage to pursue statutory interest even after appraisal resolves the dollar amount.

Steps to Take After a Property Insurance Dispute

1. Document Everything

• Photograph and video all visible mold, water staining, and damaged personal property.

• Keep humidity readings, moisture maps, and lab testing results.

• Save receipts for temporary repairs and hotel stays (often reimbursable under Additional Living Expenses).

2. Mitigate Further Damage

Texas policies impose a duty to mitigate. Hire an IICRC-certified mold remediation company to set up containment and dehumidifiers. Obtain a Certificate of Mold Damage Remediation (Texas Occupations Code ch. 1958) to show proper protocols.

3. Obtain Independent Estimates

Request a line-item Xactimate estimate from a reputable contractor. Compare to the insurer’s scope to identify omitted items (tear-out drywall, HEPA filtration, final clearance testing).

4. Send a Formal Demand Letter

Under Tex. Ins. Code §542A.003, give 60 days’ notice before filing suit. The letter must state:

• The specific complaint.

• The amount of damages, attorney’s fees, and interest.

• Any policy violations.

Consider certified mail or USPS Priority with tracking.

5. File a Complaint with the Texas Department of Insurance (TDI)

TDI investigates patterns of unfair claims handling. Submit evidence online at Texas Department of Insurance. While TDI cannot award money, its inquiry pressures insurers to comply.

6. Preserve Suit Deadlines

Calendar contractual limitations and statutory limitations for bad faith. Missing a deadline can bar recovery permanently.

When to Seek Legal Help in Texas

Indicators You Need an Attorney

• The insurer blames pre-existing conditions or maintenance.

• Your claim has stalled past 45 days without payment.

• The adjuster’s estimate is less than professional bids.

• The insurer demands an Examination Under Oath (EUO).

Louis Law Group represents Houston homeowners exclusively on a contingency-fee basis—no fees unless we recover. Our attorneys are licensed in Texas, appear regularly in Harris County district courts, and leverage building science experts to prove mold causation and cost.

What to Expect During Representation

• Free Case Evaluation – Call 833-657-4812. We review your policy, estimate damages, and map out deadlines.

• Comprehensive Claim File Request – We demand the insurer’s underwriting file, adjuster logs, and photos.

• Appraisal or Litigation Strategy – We pursue the fastest route to full payment, whether through appraisal, pre-suit mediation, or court.

• Settlement or Trial – Most disputes resolve via settlement; however, our trial team is ready for jury verdicts when necessary.

Local Resources & Next Steps

Harris County District Clerk – file records search and court dates. Houston Bar Association – lawyer referral and modest means programs. Texas State Law Library Mold Guide – statutes and regulations on mold remediation.

Protecting your family’s health and the value of your biggest investment requires immediate action when mold appears. Under Texas law, you have powerful tools—prompt payment penalties, bad faith damages, and appraisal—to force insurers to honor their promises.

Take Action Now If your property insurance claim has been delayed, underpaid, or denied, call Louis Law Group at 833-657-4812 for a free case evaluation and policy review. Let experienced Houston insurance attorneys pursue the full benefits you are owed under Texas law.

Legal Disclaimer: This guide is for informational purposes only and does not create an attorney‑client relationship. Laws change frequently; consult a licensed Texas attorney for advice on your specific situation.