Houston Guide to Texas Property Insurance & Mold Claims

Estimated reading time: 13 min read

Introduction: Why Houston Homeowners Need to Master Texas Property Insurance Law

Houston’s subtropical climate, heavy rainfall, and proximity to the Gulf of Mexico create a perfect storm for property damage—especially mold growth following water intrusions. Each year, thousands of Houston homeowners face insurance claim delays, underpayments, or outright denials for mold, wind, hail, and hurricane losses. A 2023 report by the Texas Department of Insurance (TDI) found that water-related claims, including mold, comprise more than 30% of all homeowners’ insurance complaints filed in Texas. Understanding Texas property insurance law is essential for protecting your investment and your family’s health. The Texas Insurance Code, prompt-payment statutes, and bad-faith remedies offer powerful tools—but only if you know how and when to use them. This guide, written for Houston residents, walks you through: common disputes, statutory deadlines, appraisal rights, and actionable steps to preserve your claim. We lean slightly in favor of policyholders because insurers have significant resources and legal teams; homeowners deserve balanced information and fair treatment.

Bottom line: If your insurer drags its feet or undervalues your damage, Texas law gives you leverage—use it. And if the carrier refuses to budge, experienced counsel like Louis Law Group can help level the playing field.

Understanding Texas Property Insurance Law

Key Statutes Every Houston Homeowner Should Know

• Texas Insurance Code Chapter 542—Prompt Payment of Claims. Insurers must acknowledge, investigate, and pay or deny claims within strict timelines. Violations can trigger 18% annual interest plus attorney’s fees.

• Texas Insurance Code Chapter 541—Unfair Settlement Practices. Protects policyholders from misrepresentation, underpayment, and other bad-faith conduct. Successful plaintiffs may recover actual damages, punitive damages, and fees.

• Texas Administrative Code §5.4007. Regulates mold-related limitations in homeowner policies. While carriers may exclude mold beyond a sub-limit, they must offer buy-back endorsements.

• Statute of Limitations. Most breach-of-contract and bad-faith actions must be filed within two years from the date the cause of action accrues (Tex. Civ. Prac. & Rem. Code §16.003), though policy language can shorten the window to as little as one year. Always confirm with counsel.

Prompt-Payment Deadlines at a Glance

• 15 days – Acknowledge receipt of claim and request any additional information (Tex. Ins. Code §542.055).

• 15 business days after receiving all requested items – Accept or deny the claim in writing.

• 5 business days after notice of acceptance – Pay the claim.

Failure to meet any of these deadlines can expose the insurer to statutory interest and fees, empowering homeowners to negotiate from a position of strength.

Common Property Insurance Disputes in Texas

1. Mold & Water Damage

Houston’s humidity and frequent flooding make mold claims pervasive. Insurers often dispute the cause of mold, arguing pre-existing conditions or poor maintenance. Texas law allows sub-limits, but carriers must clearly state them and offer buy-back options. If your policy includes only a $5,000 mold cap, consider an endorsement at renewal to protect full replacement cost.

2. Wind and Hail

Severe spring storms routinely pound Harris County roofs. Disagreements center on repair scope—full roof replacement versus patchwork. Under Texas law, insurers must pay to restore property to its pre-loss condition; if matching shingles are unavailable, full replacement may be required.

3. Hurricane & Flood-Related Losses

Though flood coverage is largely handled through the NFIP, wind-driven rain is usually covered by standard homeowner policies. Disputes arise over concurrent causation (wind vs. flood). Recent Fifth Circuit decisions emphasize the insurer’s burden to segregate covered and uncovered damages.

4. Fire & Smoke

Disputes often revolve around smoke remediation costs and personal property valuation. Maintain receipts and photographic proof of contents to expedite resolution.

5. Repair Scope & Pricing

Insurers frequently use third-party estimating platforms that underprice labor in Houston’s competitive construction market. Obtaining independent estimates is crucial, especially for complex mold remediation requiring certified industrial hygienists.

Texas Legal Protections & Regulations

Appraisal Clause: Your Right to a Neutral Valuation

Most Texas homeowner policies contain an appraisal provision. Either party can invoke it when disagreeing on the amount of loss (not coverage). Deadlines vary by policy, but Texas courts generally enforce appraisal awards absent fraud or bias. Once invoked, each side hires an appraiser; together they select an umpire. The panel’s determination is binding on amount—but not coverage—so reserve coverage arguments if needed.

Bad Faith & Extra-Contractual Damages

Under Arnold v. National County Mutual (725 S.W.2d 165, Tex. 1987) and subsequent cases, insurers may be liable for bad faith when they fail to reasonably investigate or delay payment without justification. Chapter 541 codifies these duties. Courts may award:

• Actual damages (e.g., additional living expenses, loss of use).

• Treble damages for knowing violations.

• Pre- and post-judgment interest, plus reasonable attorney’s fees.

Recent Court Rulings Impacting Houston Policyholders

• Alstate Constr. v. Travelers (S.D. Tex. 2022) – Reaffirmed that appraisal does not bar bad-faith claims when insurer delays invocation until litigation.

• Hinojos v. State Farm Lloyds, 619 S.W.3d 651 (Tex. 2021) – Held that prompt-payment penalties may still apply after appraisal.

These decisions strengthen homeowners’ positions by ensuring insurers cannot shield themselves merely by invoking appraisal late in the game.

Steps to Take After a Property Insurance Dispute

• Document Immediately. Photograph everything—floor to ceiling. For mold, capture moisture readings and take video of visible growth. Keep damaged materials as evidence until the insurer inspects.

• Mitigate Further Damage. Texas policies require reasonable steps to prevent additional loss. Engage a reputable water-remediation firm to dry out areas—insurers reimburse reasonable mitigation costs.

• Request a Certified Copy of Your Policy. Texas law obligates carriers to provide one upon request. Review for mold sub-limits, appraisal language, and suit-limitation clauses.

• Obtain Independent Estimates. Secure at least two licensed Houston contractors or mold remediation specialists. Independent estimates serve as leverage if carrier pricing is low.

• Keep a Claim Diary. Note every call, email, and inspection. Under Chapter 542, timeline violations can yield 18% interest—your diary proves delays.

File a Complaint with TDI. If an adjuster ignores you or undervalues your claim, file online with the TDI Complaint Portal. Carriers must respond to TDI within 15 days.

• Consider Appraisal. If only the dollar amount is contested, written demand for appraisal can break a deadlock. Choose a competent, impartial appraiser familiar with Houston construction costs.

• Consult an Attorney Early. Waiting until the statute of limitations is risky, especially if policy shortens it. A lawyer can send a pre-suit notice letter under Tex. Ins. Code §542A.003, preserving your right to fees.

When to Seek Legal Help in Texas

Although some claims settle without litigation, several red flags signal it’s time to call a Houston insurance attorney:

• Carrier alleges pre-existing mold or wear without evidence.

• Offer is far below your independent estimates.

• Adjuster repeatedly cancels inspections or changes point-of-contact.

• You receive a reservation-of-rights letter citing vague policy exclusions.

• Appraisal invoked but insurer names an unqualified appraiser.

Louis Law Group represents Texas property owners statewide and maintains local counsel in Houston. The firm’s attorneys are licensed under the State Bar of Texas, comply with Tex. Disciplinary Rules of Professional Conduct, and have recovered millions for policyholders in mold, wind, and hurricane disputes. Initial consultations are free, and many cases are handled on contingency—meaning no fees unless there’s a recovery.

Local Resources & Next Steps

State & Local Agencies

Texas Department of Insurance (TDI) – File consumer complaints, read bulletins, and verify adjuster licenses. Texas Judicial Branch – Locate Harris County district courts for filing lawsuits. Houston Bar Association – Lawyer referral & modest-means programs.

Statutory Deadlines Cheat Sheet

• Claim filing: ASAP, but within policy-stated period (often 30–90 days after loss).

• Suit limitation: 1–2 years from date of loss, depending on policy.

• Pre-suit notice: 60 days before filing suit (Tex. Ins. Code §542A.003).

• Appraisal demand: Check policy; some require written demand within 60 days of dispute.

Next Steps & Powerful Call to Action

If your Texas property damage claims have been delayed, underpaid, or denied, you don’t have to fight alone. Louis Law Group offers Houston homeowners comprehensive claim reviews, policy analysis, and aggressive legal representation when needed.

Call 833-657-4812 now for a FREE case evaluation and policy review. Don’t miss critical deadlines or settle for less than you deserve under Texas property insurance law Houston residents rely on for protection.

Legal Disclaimer

This guide is for educational purposes only and does not constitute legal advice. Reading it does not create an attorney-client relationship with Louis Law Group or any of its lawyers. Laws and regulations change; consult a qualified attorney for advice regarding your specific situation.