Texas Property Insurance Law: Fort Worth Mold Damage Guide

14 min read

Introduction: Why Fort Worth Homeowners Must Understand Mold Damage Claims

Fort Worth sits in the heart of North Texas, where spring hailstorms, torrential summer downpours, and humid subtropical weather create perfect conditions for water intrusions—and the mold growth that follows. When mold spreads behind walls or under flooring, remediation can be costly. Unfortunately, insurers often delay, underpay, or deny mold damage claims, arguing that the problem is “long-term,” “maintenance-related,” or capped by policy sub-limits. Knowing your rights under Texas property insurance law empowers you to push back, document losses accurately, and—when necessary—hold carriers accountable in court.

This legal guide is tailored to Fort Worth homeowners and policyholders dealing with mold damage or any other property loss. We explain relevant sections of the Texas Insurance Code, statutory deadlines, appraisal procedures, and bad-faith protections. We also outline practical steps— from drying out your home to filing a complaint with the Texas Department of Insurance (TDI). While the focus is on mold, the same principles apply to wind, hail, fire, and water losses.

Understanding Texas Property Insurance Law

Key Statutes Every Policyholder Should Know

• Texas Insurance Code Chapter 542 (Prompt Payment of Claims Act): Requires insurers to acknowledge, investigate, and pay or deny claims within specific timelines. Violations may trigger 18% annual interest and attorneys’ fees.

• Texas Insurance Code Chapter 541: Prohibits unfair claims settlement practices, including misrepresenting policy language, failing to attempt a fair settlement, or forcing insureds into unnecessary litigation.

• Texas Property Code §541.060: Provides additional causes of action for unfair practices.

• Statute of Limitations: Most contractual lawsuits against an insurer must be filed within four years of the breach unless the policy shortens this period (Texas Civil Practice & Remedies Code §16.004). Many policies reduce the deadline to two years and one day. Check your declarations page.

The Prompt Payment Clock

• 15 days — Insurer must acknowledge claim and request information.

• 15 days after receiving requested items — Insurer must accept or deny the claim (may extend to 45 days with written notice).

• 5 business days — Insurer must pay after agreeing to settle.

If your carrier misses these deadlines, you may recover the unpaid amount plus 18% interest and reasonable attorneys’ fees under Tex. Ins. Code §542.060.

Bad Faith and Extra-Contractual Damages

Texas recognizes two paths to hold insurers accountable:

• Common-law bad faith (per Arnold v. Nat’l County Mutual, 1989): Requires evidence the insurer had no reasonable basis for denying or delaying payment.

• Statutory bad faith under Chapter 541

Victims may recover economic loss, mental anguish, treble damages for knowingly wrongful conduct, and attorneys’ fees.

Common Property Insurance Disputes in Texas

1. Mold Damage (Focus of This Guide)

Many policies limit mold remediation coverage to $5,000–$10,000 unless you purchased an endorsement. Insurers may assert:

• The mold resulted from “continuous leakage” and is therefore excluded.

• Humidity, condensation, or wear and tear are maintenance issues.

• Remediation costs exceed the sub-limit.

A thorough investigation—often with an independent industrial hygienist—can prove that sudden water events (e.g., burst pipe, roof puncture) caused the mold, thus triggering broader coverage.

2. Wind and Hail Roof Claims

North Texas leads the nation in hail events. Disputes arise over matching shingles, full vs. partial roof replacement, and cosmetic vs. functional damage.

3. Water Damage

Pipe breaks during winter freezes (recall Winter Storm Uri, 2021) prompt arguments over “gradual leaks” exclusions.

4. Fire and Smoke Losses

Carriers may depreciate labor or claim pre-existing damage.

5. Hurricane and Tornado Catastrophes

Although Fort Worth is inland, remnants of Gulf hurricanes and EF-rated tornadoes wreak havoc. Coverage disputes often involve wind vs. flood causation.

Texas Legal Protections & Regulations

Appraisal Clause

Most Texas policies include an appraisal provision. Either side may invoke it to resolve valuation disputes, not coverage questions. Statutory or case law deadlines don’t exist, but courts expect appraisal demands within a “reasonable time.” After the 2019 Texas Supreme Court decision in Barbara Technologies v. State Farm, appraisal no longer bars prompt-payment penalties if the carrier violated Chapter 542 before invoking appraisal.

Statutory Deadlines Recap

• Notice of Claim to Insurer: ASAP, but generally within the policy’s “prompt notice” clause.

• Statute of Limitations: 2–4 years (check your policy).

• TDI Complaint: Ideally within one year of dispute.

Recent Case Law Shaping Mold & Property Claims

• Orchid Avenue v. USAA (N.D. Tex. 2022) — Court allowed extra-contractual mold claim to proceed where insurer delayed testing for 90 days.

• Menchaca v. USAA (Tex. 2017) — Clarified overlap between contract and extra-contractual damages; still aids policyholders alleging bad faith.

Texas Department of Insurance Oversight

TDI regulates carrier conduct, investigates complaints, and issues fines. File online or call 800-252-3439. TDI cannot award monetary damages but pressure from regulators often accelerates payment.

Practical Steps After a Property Insurance Dispute

1. Mitigate Further Damage

Texas policies require you to protect the property. For mold, shut off water, run dehumidifiers, and hire an IICRC-certified remediation firm. Keep receipts.

2. Document Everything

• Date-stamped photos/video of moisture, mold colonies, and damaged personal property.

• Retain plumber or roofer reports that identify the sudden event (burst pipe, wind-created opening).

• Maintain a claim diary noting adjuster visits, phone calls, and promises.

3. Secure Independent Estimates

Obtain Xactimate-formatted bids from reputable contractors. For mold, include testing, containment, removal, and build-back.

4. Review Policy Language

Confirm endorsements, sub-limits, and exclusions. Look for “Fungus, Mold or Rot” provisions and “Limited Water Damage Coverage.”

5. Communicate in Writing

Email or certified mail adjusters. Quote Chapter 542 deadlines. Example: “Pursuant to Tex. Ins. Code §542.055, please provide a written acceptance or denial of my claim within 15 days.”

6. Invoke Appraisal When Appropriate

Send written demand naming a qualified appraiser. Select someone experienced in mold remediation costs.

7. File a TDI Complaint

If deadlines lapse or offers are unreasonably low, complete the online form at TDI’s complaint portal.

8. Consult a Fort Worth Insurance Attorney

Delay tactics cost money and health. An attorney can send a pre-suit notice letter under Chapter 541/542, demand appraisal, or file suit in Tarrant County District Court.

When to Seek Legal Help in Texas

Consider engaging counsel when:

• The carrier denies coverage based on alleged policy exclusions or mold caps.

• Payment is less than remediation bids.

• Deadlines under Chapter 542 have passed.

• Health issues arise due to ongoing mold exposure.

Louis Law Group’s attorneys are licensed in Texas and focus solely on policyholder rights. We front costs for independent hygienists, estimators, and expert witnesses. Most cases are handled on contingency—no fee unless we win.

Local Resources & Next Steps

• Tarrant County District Courts — 100 N. Calhoun St., Fort Worth, TX 76196. Civil filing fees start at $350.

• Texas Legal Services Center — Free guidance for income-qualified residents.

• State Bar of Texas Lawyer Referral — 800-252-9690.

• Fort Worth Better Business Bureau — Research contractor reputations before repairs.

Legal Disclaimer: This guide provides general information about Texas property insurance law and is not legal advice. Every claim is unique. Consult a licensed Texas attorney about 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. Protect your Fort Worth home and health—act before crucial deadlines expire.