Texas Property Insurance Law Guide – Arlington

Texas Property Insurance Law Guide for Arlington Homeowners

13 min read

Introduction: Why Arlington, Texas Homeowners Need to Know Their Rights

Straight-line winds off Lake Arlington, spring hail storms, and North Texas temperature swings all put extra pressure on roofs, HVAC systems, and plumbing lines. When those systems fail, the resulting water intrusion can quickly turn into mold damage—one of the costliest and most hotly disputed perils under Texas property insurance policies. Homeowners in Arlington routinely face claim delays, underpayments, and denials, not only for mold but also for fire, hail, wind, and pipe-burst losses.

Understanding your rights under Texas property insurance law is the first step to leveling the playing field against carriers that control the money, set investigation timelines, and draft the policy language. This guide, written with Arlington residents in mind, walks you through:

• The provisions of the Texas Insurance Code that most impact claim payments.

• Key statutory deadlines—especially the Prompt Payment of Claims Act.

• Typical disputes, from hidden mold growth to scope-of-repairs battles after hailstorms.

• Step-by-step actions you can take today to protect your case.

• When and how a seasoned Arlington insurance attorney can turn the tide.

Whether your insurer argues that mold is a pre-existing condition, drags its feet on issuing a coverage decision, or flatly refuses to pay for professional remediation, you have powerful tools under Texas law to fight back.

Understanding Texas Property Insurance Law

1. Texas Insurance Code Chapters That Matter Most

The Texas Legislature has codified consumer protections that apply to virtually every residential property policy written in the state. Arlington homeowners should pay close attention to:

Chapter 542 – Prompt Payment of Claims Act (PPCA): Requires insurers to acknowledge, investigate, and pay or deny claims within strict timeframes. Violations can trigger 18% annual interest and attorney’s fees. Full text available here.

• Chapter 541 – Unfair Methods of Competition and Unfair or Deceptive Acts or Practices: The backbone of Texas bad-faith law. Policyholders can sue for treble damages if an insurer knowingly misrepresents policy terms or drags out payment without a reasonable basis.

• Chapter 542A – Severe Weather-Related Claims: Applies to wind and hail losses common in Tarrant County. It imposes pre-suit notice requirements and may limit attorney’s fees when certain conditions are met, but it also promotes faster resolutions.

2. Texas Prompt Payment Deadlines

• 15 days: The insurer must acknowledge receipt of the claim and request any additional information it needs.

• 15 business days: Once the carrier receives all requested information, it must accept or deny the claim—or explain why it needs more time.

• 45 days: If extra time is requested, the insurer gets one 45-day extension.

• 5 business days: After accepting a claim (in whole or in part), payment must be issued within five business days.

Missed deadlines can trigger statutory interest at 18% per year plus reasonable attorney’s fees. This is a potent negotiation lever during any mold damage or structural repair dispute.

3. Bad-Faith Protections

Texas recognizes two tiers of bad faith: common-law bad faith and statutory bad faith under Chapters 541 and 542. An insurer acts in bad faith if it denies or delays a claim without a reasonable basis or fails to conduct a proper investigation. Recent Texas Supreme Court decisions—such as USAA Tex. Lloyds Co. v. Menchaca (2018) and Barbara Techs. Corp. v. State Farm Lloyds (2019)—clarify that policy benefits can form the basis of bad-faith damages even when contract benefits are paid late rather than denied outright.

Common Property Insurance Disputes in Texas

Arlington homeowners report a wide range of insurance headaches. The most common include:

• Mold Damage: Stagnant water from roof leaks or slab leaks can spawn toxic mold within 24–48 hours. Disputes typically revolve around "long-term seepage" exclusions or low sub-limits (often $5,000) for mold remediation.

• Wind & Hail Claims: North Texas leads the nation in hail events. Insurers may classify functional damage as "cosmetic" to avoid full roof replacement.

• Water Damage from Burst Pipes: Winter freezes and hot, humid summers strain plumbing systems. Insurers sometimes blame homeowners for "failure to maintain," ignoring sudden-and-accidental coverage provisions.

• Fire & Smoke Losses: Disputes over cleaning versus replacing smoke-damaged materials can mean tens of thousands of dollars.

• Scope-of-Repair Battles: Even when liability is accepted, carriers may underprice labor and materials in Xactimate estimates, leading to insufficient payouts.

Carriers rely on policy exclusions, depreciation schedules, or engineering reports that minimize visible damage. Knowing how to push back—by demanding a re-inspection or invoking the appraisal clause—can add thousands to your settlement.

Texas Legal Protections & Regulations

1. Statute of Limitations

Most property insurance policies in Texas shorten the time to file suit. While the standard Texas contract statute of limitations is four years, carriers often insert a contractual limitation of two years and one day from the date of loss. Courts generally enforce these shortened periods, so calendaring deadlines is critical.

2. The Appraisal Process

The appraisal clause is an alternative dispute resolution mechanism found in most Texas policies. Either party can invoke appraisal to resolve the amount of loss (not coverage). Key points:

• Once invoked, each side chooses a competent, impartial appraiser.

• The two appraisers select an umpire; if they cannot agree, a court can appoint one.

• A decision signed by any two of the three participants is binding, unless tainted by fraud.

• The Texas Supreme Court, in State Farm Lloyds v. Johnson (2009), confirmed courts should stay litigation pending appraisal when the dispute is solely about pricing or scope.

Note: The appraisal award does not automatically create bad-faith liability, but under Barbara Techs., late payment after appraisal can trigger Chapter 542 interest.

3. Recent Court Rulings Affecting Arlington Homeowners

Ortiz v. State Farm Lloyds (Tex. 2020): Confirmed that full payment of an appraisal award can extinguish contract claims, but not necessarily statutory bad-faith claims. Crum v. State Farm Lloyds (N.D. Tex. 2022): Held that alleged misrepresentations about mold coverage could survive a motion to dismiss under Chapter 541.

4. Departmental Oversight and Complaints

The Texas Department of Insurance (TDI) fields consumer complaints and can fine or censure carriers that violate the Insurance Code. While TDI cannot award damages, a robust file with the agency often nudges insurers toward fair settlements.

Steps to Take After a Property Insurance Dispute

1. Document Everything—Immediately

• Take time-stamped photos and video of all visible damage, including hidden areas where mold growth is suspected (behind baseboards, under sinks).

• Preserve damaged materials. Mold-stained drywall or roofing shingles serve as physical evidence during re-inspection or litigation.

• Start a claim diary. Note every phone call, adjuster visit, and promise made. Texas courts routinely admit these logs.

2. Mitigate Further Damage

Your policy requires you to prevent additional loss. Hire an IICRC-certified mold remediation company if needed. Keep all invoices—reasonable mitigation costs are reimbursable.

3. Obtain Independent Estimates

TDI encourages policyholders to secure at least two contractor bids. Independent Xactimate estimates often highlight underpriced line items in the carrier’s scope.

4. Request the Adjuster’s Report

You are entitled to a copy of any engineer or third-party report the insurer relies on. If a carrier refuses, cite Texas Insurance Code §542.003(b)(4), which prohibits withholding information necessary for a claim.

5. Invoke Appraisal (If Appropriate)

If you agree on coverage but disagree on price, send written notice invoking appraisal. Use certified mail and keep proof of delivery. Remember, appraisal does not toll the two-year suit-filing deadline.

6. File a Complaint with TDI

Submit the online form along with supporting documents. While TDI will not litigate for you, carriers dislike regulatory scrutiny and often reopen stalled investigations.

7. Keep an Eye on Deadlines

• Check your policy for the "two years and one day" limitation to sue.

• Calendar the 60-day pre-suit notice required under Chapter 542A for weather-related claims.

When to Seek Legal Help in Texas

Consult a lawyer when:

• The insurer denies your claim citing exclusions you do not understand.

• Payment is grossly inadequate, and re-inspection or appraisal has failed.

• The carrier is non-responsive beyond PPCA deadlines.

• You are overwhelmed by conflicting engineering reports.

Louis Law Group’s attorneys are licensed in Texas and focus exclusively on property insurance litigation. The firm fronts all costs; you pay nothing unless money is recovered. By invoking statutory penalties and leveraging recent case law, a skilled Texas property damage claims lawyer can often turn a zero-dollar denial into a six-figure settlement.

Local Resources & Next Steps for Arlington Homeowners

Tarrant County Courts – Filing locations and docket search. State Bar of Texas Lawyer Referral Service – 30-minute consultations at reduced rates. Texas Department of Insurance Consumer Help Line – 800-252-3439.

Take Action Today: If your mold, hail, or water damage claim has been delayed, underpaid, or denied, don’t let the carrier run out the clock on your legal rights. Call Louis Law Group at 833-657-4812 for a free case evaluation and policy review. Our Arlington team will analyze your policy, compare estimates, and fight for every dollar you are owed.