Texas Property Insurance Law Houston Guide for Mold & More

13 min read

Introduction: Why Houston Homeowners Need to Know Their Insurance Rights

From Hurricanes Ike and Harvey to Winter Storm Uri, Houston has endured nearly every weather threat Texas can offer. Add year-round humidity, and it’s easy to see why mold, water, and wind claims flood insurers’ desks in Harris County. Yet many homeowners receive delayed payments, lowball estimates, or outright claim denials when they need coverage most. Understanding Texas property insurance law houston and the specific rules that govern insurers can empower you to push back, secure fair compensation, and rebuild faster.

This comprehensive guide explains how the Texas Insurance Code, Texas Department of Insurance (TDI) regulations, and recent court decisions protect policyholders. You’ll learn:

• Key deadlines under the Prompt Payment of Claims Act

• What constitutes insurer bad faith in Texas

• How to navigate the appraisal process when you and the carrier disagree on the amount of loss

• Special considerations for mold damage and humid Houston climates

• Step-by-step actions to preserve evidence, increase leverage, and avoid common pitfalls

If your claim has been delayed, underpaid, or denied, keep reading—and remember you can always call Louis Law Group at 833-657-4812 for a free, no-obligation policy review.

Understanding Texas Property Insurance Law

1. The Texas Insurance Code

Two chapters matter most for everyday homeowners:

• Chapter 541 – Unfair Methods of Competition & Unfair or Deceptive Acts or Practices. This statute allows policyholders to sue for bad-faith conduct such as knowingly undervaluing a covered loss or misrepresenting policy terms. Violations can lead to actual damages, court costs, attorney’s fees, and up to treble damages when the carrier acted knowingly.

• Chapter 542 – Prompt Payment of Claims Act (PPCA). Insurers must meet hard deadlines: acknowledge the claim within 15 calendar days, accept or reject coverage within 15 business days after receiving all requested documentation (with a possible 45-day extension), and pay within 5 business days of agreeing to cover the loss. Failure triggers an 18% annual interest penalty plus reasonable attorney fees.

Read the full text on the Texas Insurance Code Chapter 541.

2. Common-Law Bad Faith in Texas

Even without statutory violations, Texas recognizes a common-law duty of good faith and fair dealing. Insurers breach that duty when they refuse, without a reasonable basis, to pay a claim or properly investigate. Landmark cases such as Arnold v. Nat’l County Mutual Fire Ins. Co. and Universe Life v. Giles confirm you can sue for mental anguish, punitive damages, and more in egregious scenarios.

3. Recent Supreme Court Decisions Affecting Homeowners

Barbara Technologies Corp. v. State Farm Lloyds (Tex. 2019). An appraisal award does not bar PPCA penalties, encouraging policyholders to pursue statutory interest even after settling the amount of loss. Ortiz v. State Farm Lloyds (Tex. 2019). While an appraisal award may limit breach-of-contract claims, extra-contractual claims survive if the insurer’s conduct was independently wrongful. Hinojos v. State Farm Lloyds (Tex. 2021). Reaffirmed that prompt-payment penalties apply when the insurer waits for appraisal before paying.

Together, these precedents strengthen the bargaining power of Houston policyholders by preserving penalty claims after appraisal.

Common Property Insurance Disputes in Texas

While every loss is unique, the following disputes repeatedly appear on the desks of Houston insurance attorneys:

1. Wind and Hail Damage

Texas leads the nation in severe thunderstorm and hurricane activity. Insurers often argue roof shingles were merely “cosmetic” or pre-existing, deducting depreciation or refusing full replacement.

2. Water Intrusion & Mold Growth

Humidity over 80% for much of the year means even minor leaks rapidly spawn mold colonies. Many policies limit mold remediation to $5,000 or exclude it unless the water loss is sudden and accidental. Understanding the difference between gradual seepage (usually excluded) and a sudden pipe burst (generally covered) is critical to maximizing payouts.

3. Hurricane & Tropical Storm Losses

Storm surge and surface water fall under National Flood Insurance Program (NFIP) policies, whereas wind-driven rain is typically covered by homeowners insurance. Disputes over “anti-concurrent causation” clauses and deductibles frequently arise.

4. Fire & Lightning Claims

Although coverage is broad, insurers may withhold payment for smoke or soot damage hidden behind walls, leading to scope disagreements.

5. Freeze Events

February 2021 exposed Houston homes to widespread pipe bursts. Carriers frequently contest whether homeowners mitigated damages quickly enough—a requirement under most policies.

Regardless of peril, the pattern is familiar: partial payments, lengthy engineering reviews, or denials citing ambiguous exclusions. Knowing the law helps you fight back.

Texas Legal Protections & Regulations

1. Statutory Deadlines at a Glance

• Notice of Claim: Policy terms often require prompt notice, but Texas courts allow reasonable delay unless the insurer proves prejudice.

• Insurer Acknowledgment: 15 calendar days (Chapter 542.055).

• Coverage Decision: 15 business days after receiving all items (Chapter 542.056). Adds 45 days if more time is reasonably needed.

• Payment: 5 business days after notice of acceptance (Chapter 542.057).

• Statute of Limitations: 4 years for breach of contract; 2 years (plus up to 180-day tolling) for Chapters 541 & 542 claims. Many policies shorten the limitations period to 2 years—check your Declarations page.

2. The Appraisal Clause

Most Texas policies allow either party to demand appraisal when there is disagreement on the amount of loss. Typical steps:

• Written demand by certified mail.

• Each side selects a disinterested appraiser within 20 days.

• Appraisers choose an umpire. If they cannot agree, a court may appoint one.

• The award, signed by any two of the three participants, becomes binding absent fraud.

Time limits vary—some policies require invocation within 60 days of the carrier’s decision. Missing the window can forfeit your right, so act quickly.

3. Penalties for Bad Faith

Besides treble damages under Chapter 541 and 18% interest under Chapter 542, Texas juries may award exemplary damages for intentional misconduct. Courts also award attorney fees under Chapter 542A, though recent amendments cap fees in weather-related lawsuits if claimants don’t give 61-day pre-suit notice.

Steps to Take After a Property Insurance Dispute

1. Secure the Scene and Mitigate Further Damage

Your policy obligates you to prevent additional loss. Board up shattered windows, dry saturated drywall, and engage professional mold remediation if required. Keep all receipts—they’re reimbursable.

2. Document Everything

• Photograph and video every room, close-ups of damage, and undamaged areas to establish pre-loss condition.

• Maintain a claim diary with dates, times, and names of anyone you spoke with at the insurance company.

• Request a certified copy of your policy, including endorsements—insurers must provide it within 30 days under Texas law.

3. Obtain Independent Estimates

Don’t rely solely on the carrier’s adjuster. Qualified contractors or public adjusters using Xactimate can reveal under-scoped line items, especially for mold remediation, roof decking, or code-upgrade costs.

4. Communicate in Writing

Email or send certified letters so there’s a paper trail. Under Chapter 542A.003, a detailed pre-suit notice—including damages, fees, and expert reports—is required at least 61 days before filing suit in weather claims.

5. Consider Appraisal

If the dispute centers on price rather than coverage, appraisal is often cheaper and faster than litigation, but speak with a houston insurance attorney first. Signing away rights through an appraisal stipulation can backfire if the dispute actually involves coverage.

6. File a Complaint with TDI

The Texas Department of Insurance offers a free, online complaint system. While it can’t order payment, it pressures carriers to respond.

Texas Department of Insurance consumer claims webpage

When to Seek Legal Help in Texas

You may handle minor disputes yourself, but consult an attorney when:

• The carrier denies coverage citing exclusions you don’t understand.

• Your home suffers extensive mold damage exceeding sub-limits.

• Delay penalties under Chapter 542 could meaningfully increase recovery.

• The deadline to file suit or invoke appraisal is approaching.

• The insurer accuses you of fraud or misrepresentation.

Louis Law Group has recovered millions for Texas homeowners. We advance costs, hire trusted engineers and remediation specialists, and charge no fee unless we win. Our attorneys are licensed in Texas courts and familiar with Harris County juries, maximizing local leverage.

If your property insurance claim has been delayed, underpaid, or denied, call 833-657-4812 for a free case evaluation and policy review.

Local Resources & Next Steps

Texas court system portal – Dockets, forms, and information on filing suits. Houston Bar Association – Lawyer referral and free legal clinics.

• Lone Star Legal Aid – (713) 652-0077 for income-qualified residents.

• Harris County Clerk’s Office – File appraisal-related petitions or motions to appoint an umpire.

Don’t let red tape or insurer tactics derail your recovery. Texas law is designed to penalize foot-dragging and unfair conduct—but only if you assert your rights on time. Act quickly, document thoroughly, and consider professional help when the stakes are high.

Ready for answers? Call Louis Law Group at 833-657-4812 or complete our online form for a same-day callback. Let us fight for the payout you deserve while you focus on getting life back to normal.

Disclaimer: This guide is provided for informational purposes only and does not constitute legal advice. Reading it does not create an attorney‑client relationship. Consult a licensed Texas attorney about your specific situation before acting on any information herein.