Houston Mold Damage Claims: Texas Property Insurance Guide

11 min read

Introduction: Why Houston Homeowners Must Understand Their Property Insurance Rights

Houston’s subtropical climate, frequent Gulf Coast storms, and year-round humidity make homes especially vulnerable to water intrusion and ensuing mold damage. When moisture seeps behind walls or into attic spaces, colonies can form in as little as 24–48 hours, jeopardizing your family’s health and the structural integrity of your property. Because remediation is expensive and insurers often dispute whether the loss was sudden (covered) or gradual (potentially excluded), understanding Texas property insurance law Houston homeowners rely on is critical. The most common carrier tactics include:

• Delays—missing statutory deadlines outlined in Texas Insurance Code Chapter 542 (Prompt Payment of Claims Act).

• Underpayments—lowball estimates that omit necessary mold remediation protocols under the Texas Mold Assessment and Remediation Rules (TMARR).

• Denials—citing exclusions for long-term seepage or pre-existing conditions without adequate investigation.

This comprehensive guide, written from a homeowner-focused perspective, explains the laws, deadlines, and practical steps you can take to protect your claim in Houston, Texas. It also outlines when to seek help from an experienced Houston insurance attorney like Louis Law Group to fight back against bad-faith tactics.

Understanding Texas Property Insurance Law

Key Statutes Every Policyholder Should Know

• Texas Insurance Code §542 – Prompt Payment of Claims Act (PPCA). Insurers generally have 15 days to acknowledge a claim, 15 business days to accept or reject after receiving all information, and 60 days to pay once they agree to cover the loss. Failure triggers interest penalties and attorney’s fees.

• Texas Insurance Code §541 – Unfair Settlement Practices and Bad Faith. Provides a cause of action when an insurer misrepresents policy terms, fails to attempt a prompt, fair settlement, or refuses to pay without conducting a reasonable investigation.

• Texas Property Code §16.070 – Contract Limitations. While the general statute of limitations for breach of contract is four years, many policies shorten it to two years and one day. Courts frequently enforce these shorter periods, so act quickly.

• Texas Mold Assessment and Remediation Rules (25 TAC §78) – Set standards for licensed mold remediation and require a Certificate of Mold Damage Remediation, which can be crucial evidence when negotiating with your insurer.

Case Law Shaping Mold & Water Claims

Several Texas Supreme Court cases influence how mold damage claims are handled:

• Fiess v. State Farm Lloyds, 202 S.W.3d 744 (Tex. 2006) – Clarified that policy provisions excluding “mold, fungus or wet rot unless hidden within walls or ceilings” are enforceable, but hidden mold from a sudden burst pipe may still be covered.

• Menchaca v. USAA Texas Lloyds, 545 S.W.3d 479 (Tex. 2018) – Reaffirmed that policyholders can recover extra-contractual damages if the insurer’s statutory violation causes an independent injury.

• Ortiz v. State Farm Lloyds, 589 S.W.3d 127 (Tex. 2019) – Held that an appraisal award does not bar a bad-faith claim if the insurer mishandled the investigation prior to the appraisal.

Common Property Insurance Disputes in Texas

Mold and Water Damage

Due to Houston’s humidity and hurricane exposure, water intrusion claims are frequent. Insurers often argue mold is excluded, but coverage may exist when:

• The mold results from a covered peril (e.g., roof damage from wind/hail or a sudden pipe burst).

• The policy includes an endorsement providing limited mold coverage (often $5,000–$50,000).

• The mold was hidden and could not reasonably have been discovered earlier.

Wind & Hail Storms

Harris County leads Texas in severe thunderstorm events. Disputes arise over roof repair scope, matching shingles, and code-upgrade costs.

Hurricane and Tropical Storm Losses

Hurricane Harvey (2017) taught insurers and homeowners lessons about flood vs. wind coverage. While National Flood Insurance Program (NFIP) policies cover rising water, a standard homeowners policy covers wind-driven rain that enters through an opening caused by wind.

Fire & Smoke Claims

While mold is less common in fire claims, water used to extinguish the blaze can spawn mold if not quickly remediated.

Disputes Over Scope & Pricing of Repairs

Carriers often rely on standardized pricing software that may not account for Houston labor rates or TMARR-compliant mold protocols, resulting in undervalued claims.

Texas Legal Protections & Regulations

Statutory Deadlines You Should Track

• Notice of Claim: Give written notice “promptly” or within the time stated in your policy (often 30–90 days).

• Carrier Acknowledgment: 15 calendar days (TIC §542.055).

• Acceptance or Denial: 15 business days after all documents received, extendable to 45 days with written explanation.

• Payment Deadline: 60 days after the insurer agrees to pay (TIC §542.058).

• Filing Suit: As short as two years and one day from the date of denial or underpayment, depending on policy language.

The Appraisal Process in Texas

Most policies include an appraisal clause allowing either party to demand appraisal when there is a dispute over amount of loss. Key points:

• Either party can demand in writing—often within 60 days of disagreement.

• Each selects a competent, impartial appraiser; the two appraisers then choose an umpire.

• An award signed by two of the three is binding as to value but does not resolve coverage issues or bad-faith claims (Ortiz).

Bad Faith & Extra-Contractual Damages

If an insurer violates §541 or §542, homeowners may recover interest (currently 10% + judgment rate), attorney’s fees, treble damages for knowing violations, and mental anguish when proven. Recent appellate decisions emphasize that carriers cannot use appraisal to avoid liability for pre-appraisal misconduct.

Steps to Take After a Property Insurance Dispute

1. Document Everything Immediately

• Photograph and video the damage, including moisture meters or infrared images if available.

• Keep receipts for emergency mitigation such as water extraction or temporary roof tarping.

• Maintain a written log of all calls, emails, and adjuster visits.

2. Review Your Policy & Endorsements

Look for mold limitations, sublimits, and exclusions. Note applicable deductibles (wind/hail deductibles are often 1%–2% of dwelling value in coastal counties).

3. Obtain Independent Estimates

Texas law allows you to hire licensed mold assessors and remediators. Make sure they follow TMARR and provide a Certificate of Mold Damage Remediation, which can rebut insurer claims of pre-existing conditions.

4. Comply with Carrier Requests, But Protect Yourself

Submit a sworn proof of loss if requested (often within 60 days). Provide access for inspections, but insist on written requests, and never sign a broad release without counsel.

5. Demand Appraisal or File a Complaint

If the dispute is purely about price, a timely appraisal demand may speed resolution. If the carrier is ignoring statutory deadlines, file a complaint with the Texas Department of Insurance Consumer Protection.

6. Preserve Your Right to Sue

Calendar the policy’s limitations period. Send Texas Insurance Code §542A.003 pre-suit notice at least 61 days before filing suit, including the amount owed and attorney’s fees sought.

When to Seek Legal Help in Texas

You should consult an attorney when:

• The insurer denies coverage claiming mold is excluded, but you believe the loss was sudden or hidden.

• You receive a lowball estimate that fails to include TMARR-compliant remediation.

• The carrier misses PPCA deadlines or refuses to communicate.

• You are asked to give a recorded statement that feels adversarial.

Louis Law Group—licensed across Texas and experienced in Houston courts—has recovered millions for policyholders. Our firm advances costs, works on contingency, and pursues both contract and extra-contractual damages when insurers act in bad faith.

Local Resources & Next Steps for Houston Homeowners

Texas Department of Insurance (TDI) – Consumer guides, complaint portal, and licensing verification. Texas Insurance Code Online – Full text of Chapters 541 and 542. Houston Bar Association Lawyer Referral Service – Low-cost consultations if you need immediate guidance. Texas Court System – Locate Harris County district courts where property insurance suits are filed.

Legal Disclaimer

This guide is for informational purposes only and does not constitute legal advice. Laws and regulations change, and the facts of each case are unique. Consult a qualified attorney licensed in Texas for advice regarding your specific situation.

Take Action Today

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. Don’t let insurer tactics jeopardize your Houston home—assert your rights under Texas law now.