Texas Property Insurance Law Guide – El Paso Mold Damage

10 min read

Introduction: Why El Paso Homeowners Need to Understand Texas Property Insurance Law

High desert living in El Paso, Texas brings its own weather quirks—monsoon downpours in late summer, rapid temperature swings, and occasional plumbing failures in older adobe and cinder-block homes. These conditions can create the perfect breeding ground for mold, a peril that Texas insurers frequently dispute, delay, or outright deny. Because mold remediation can cost tens of thousands of dollars, knowing your rights under Texas law is critical for protecting the equity in your home and your family’s health.

Many policyholders learn the hard way that insurance companies often:

• Delay investigations to push homeowners past statutory deadlines.
• Underpay by misclassifying mold as maintenance rather than a covered sudden water loss.
• Deny claims citing policy exclusions, despite endorsements or ambiguous language that should favor you under Texas law.

This guide explains exactly how Texas statutes, regulations, and court precedents empower El Paso homeowners to fight back. We’ll outline the key laws, common disputes, critical deadlines, and practical steps to tilt the playing field back toward you, the insured.

Understanding Texas Property Insurance Law

Key Statutes Every Policyholder Should Know

Texas has some of the nation’s strongest consumer protections for homeowners, codified in the Texas Insurance Code. Below are the most important sections for mold-related property damage:

• §542 (Prompt Payment of Claims Act) – Insurers must acknowledge your claim within 15 calendar days, begin an investigation, and request any additional information. They then have 15 business days (30 in certain catastrophes) to accept or deny the claim once they receive all information.

• §541 (Unfair Settlement Practices) – Prohibits misrepresenting policy provisions, failing to attempt in good faith to settle, and other bad-faith tactics. Violations may result in treble (triple) damages.

• §542A (Weather-Related Claims) – Clarifies pre-suit notice requirements and the potential for insurer proportionate responsibility, but it does not eliminate your right to sue for mold stemming from a sudden water event, such as roof leaks or pipe bursts.

• Texas Property Code §27.02 – Gives homeowners a separate cause of action against contractors who do substandard remediation work, crucial in mold claims where workmanship matters.

Bad Faith and the Duty of Good Faith & Fair Dealing

Under Arnold v. National County Mutual Fire Insurance Co., 725 S.W.2d 165 (Tex. 1987) and subsequent decisions such as Universe Life Ins. Co. v. Giles, 950 S.W.2d 48 (Tex. 1997), Texas recognizes an implied duty of good faith and fair dealing. If an insurer denies or delays a claim without a reasonable basis, you may recover extra-contractual damages, mental anguish, and punitive damages.

Common Property Insurance Disputes in Texas

While mold is the focal point of this guide, understanding other typical disputes helps illustrate insurer patterns:

• Wind and Hail Damage – Roof damage in West Texas can lead to water intrusion and hidden mold colonies.

• Plumbing Failures & Water Damage – Supply line ruptures, evaporative cooler leaks, or slab leaks are common in El Paso’s aging housing stock.

• Monsoon Flooding – Sudden rainfall can overwhelm flat roofs and stucco exteriors, triggering mold growth within 24–48 hours.

• Fire & Smoke Losses – Water used to extinguish fires often spawns mold growth if not dried promptly.

• Disputes Over Scope & Pricing – Insurers may use preferred vendor programs or software (e.g., Xactimate) that undervalue local labor and specialty mold remediation costs.

Texas Legal Protections & Regulations for Mold Claims

Statutory Deadlines (Prompt Payment Act)

• 15 days – Insurer must acknowledge the claim.

• 15 days – Insurer must accept or reject after receiving all documentation.

• 5 business days – Insurer must pay after agreeing to pay.

If the insurer misses these deadlines, §542.060 allows you to seek 18% per-annum interest on the amount owed, plus reasonable attorney fees.

The Appraisal Clause: Your Weapon Against Underpayment

Most Texas policies contain an Appraisal provision. Either side can demand it in writing when a dispute arises over the amount of loss—not coverage. Appraisal involves three participants:

• Your Appraiser

• Insurer’s Appraiser

• Neutral Umpire (if appraisers disagree)

Recent Texas Supreme Court decisions, including State Farm Lloyds v. Johnson, 290 S.W.3d 886 (Tex. 2009), uphold appraisal awards absent fraud or procedural irregularity. Acting quickly is vital; courts often deem months-long delays as waiver of the right to appraisal.

Limitations Period

Texas generally imposes a two-year statute of limitations for breach-of-contract suits over property insurance denials, and a separate two-year window for bad-faith causes of action. However, policies may contractually shorten the period to one year. Read your “Suit Against Us” clause carefully.

Regulated Mold Remediation

The Texas Department of Licensing and Regulation (TDLR) requires licensed remediators for jobs exceeding 25 contiguous square feet of mold. Failure to hire a licensed firm may jeopardize health, create future claims, and give insurers an excuse to limit payment. Always request a Mold Remediation Certificate (MRC) on completion.

Steps to Take After a Mold-Related Property Insurance Dispute

1. Document Early and Thoroughly

Within hours of discovering mold:

• Photo and video every area, including moisture sources (roof, plumbing).

• Save receipts for fans, dehumidifiers, or temporary lodging.

• Keep a written claim diary: note dates, names, phone calls, and promises.

2. Mitigate Further Damage

Texas policies require you to mitigate loss. Do not break drywall without insurer permission, but do:

• Shut off water supply.

• Run dehumidifiers.

• Hire a licensed remediation firm for emergency containment.

3. Obtain Independent Estimates

Insurers often use generic pricing. Secure at least two detailed bids from licensed mold remediators noting protocol, clearance testing, and MRC issuance.

4. Request a Certified Copy of Your Policy

Insist on the full policy, including endorsements. Texas law requires insurers to provide this upon request. Look for “Mold Limited Fungi Coverage Endorsement” or “Additional Coverage – Fungi.”

5. Comply with Sworn Proof of Loss

Most policies require a sworn proof within 60 days of request. Never ignore this—failure can forfeit your claim. List mold remediation costs, ALE (Additional Living Expenses), and personal property losses.

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

If the insurer drags its feet, file a complaint online with the Texas Department of Insurance. TDI intervention often spurs faster responses.

7. Send a §541/§542 Demand Letter

Texas law requires a 60-day pre-suit notice for unfair settlement practices claims. Include:

• Your name, address, policy number.
• Specific statutory violations.
• Demand for payment, interest, attorney fees.

Send via certified mail, return receipt requested, to preserve evidence.

When to Seek Legal Help in Texas

While you can negotiate directly, certain red flags mean it’s time to call an attorney:

• Claim exceeds $20,000 and insurer offers less than half.

• Insurer alleges prior, long-term, or “maintenance” mold.

• Request for Examination Under Oath (EUO) seems fishing expedition.

• Appraisal invoked but insurer’s appraiser lowballs unabated.

• Approaching the two-year limitations deadline.

Louis Law Group’s el Paso insurance attorneys have extensive experience navigating Texas’ prompt-payment statute, bad-faith frameworks, and appraisal pitfalls. We front costs for experts—industrial hygienists, estimators, and construction professionals—so you can level the playing field against billion-dollar carriers.

Local Resources & Next Steps

Texas Judicial Branch – Docket search, local court addresses, and self-help. El Paso Bar Association – Lawyer referral service if you need local co-counsel.

• TDLR Mold Program – Licensing lookup for remediators.

• TDI Consumer Help Line: 1-800-252-3439.

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

Take Action Today

If your property insurance claim has been delayed, underpaid, or denied—especially for costly mold damage—don’t wait until deadlines expire. Call Louis Law Group at 833-657-4812 for a free case evaluation and policy review. Our Texas-licensed attorneys fight aggressively to recover every dollar you’re owed.