Texas Property Insurance Law Houston Guide: Protect Your Claim

Estimated reading time: 13 min read

Introduction: Why Houston Homeowners Must Know Their Rights

Houston’s humid subtropical climate, combined with its exposure to Gulf Coast storms, makes property insurance claims a fact of life for many residents. From wind-driven rain during hurricanes to hidden mold damage caused by persistent humidity, homeowners routinely face costly repairs and frustrating insurance hurdles. Far too often, policyholders report delayed payments, partial settlements, or outright denials—especially when carriers blame "pre-existing conditions" or argue that mold remediation exceeds policy limits. Understanding Texas property insurance law is your first line of defense.

This guide is tailored specifically for Houston homeowners. It summarizes key provisions of the Texas Insurance Code, explains the Prompt Payment of Claims Act, outlines appraisal and bad-faith remedies, and offers clear, actionable steps to protect your investment. Whether you own a townhome in the Heights or a bay-side house in Clear Lake, the information below will help you push back against unfair claim practices and decide when to call an experienced Houston insurance attorney.

Understanding Texas Property Insurance Law

Texas Insurance Code Chapters You Need to Know

• Chapter 542 – Prompt Payment of Claims Act (PPCA): Sets strict deadlines. Insurers must acknowledge your claim within 15 calendar days, request any necessary documents, and accept or deny the claim within 15 business days after receiving all items. Once liability is accepted, payment must issue within five business days.

• Chapter 541 – Unfair Methods of Competition and Unfair or Deceptive Acts or Practices: Allows policyholders to sue for treble damages if an insurer engages in deception, misrepresentation, or other bad-faith conduct.

• Chapter 542A – Weather-Related Claims: Applies to wind, hail, hurricane, and certain water claims. It requires a 60-day presuit notice and offers carriers the right to elect to assume liability for their adjusters.

Statutes of Limitation

• Breach of contract: 4 years from the date the cause of action accrues. • Bad-faith under Chapter 541: 2 years. • Prompt Payment penalties: 2 years. Missing these deadlines can bar recovery, so calendar them as soon as you receive a denial or underpayment.

Bad-Faith Protection for Policyholders

Texas recognizes an implied covenant of good faith and fair dealing. If a carrier delays investigation, fails to give a reasonable basis for denial, or undervalues your mold or water damage, you may recover actual damages, mental anguish, and potentially punitive damages.

Common Property Insurance Disputes in Texas

• Wind and Hail Damage: Houston’s spring storms often lead to shingle loss and roof leaks that carriers claim are "wear and tear."

• Water and Mold Damage: Slow plumbing leaks, HVAC failures, or storm-driven rain spur mold colonies. Insurers frequently cite mold sub-limits or improper remediation procedures to deny costs.

• Hurricane Claims: Hurricane Harvey (2017) revealed gaps between wind and flood policies. Disputes arise over concurrent causation and anti-concurrent causation clauses.

• Fire Losses: Disagreements over smoke damage remediation or code-upgrade costs.

• Scope of Repair & Pricing: Carriers rely on standardized price lists that rarely match Houston’s labor market, resulting in lowball settlements.

Texas Legal Protections & Regulations

The Appraisal Provision

Most Texas policies include an appraisal clause allowing either party to demand a neutral evaluation of the loss amount. Key points:

• You must invoke appraisal in writing, typically within two years of the dispute, but check your policy for shorter deadlines.

• Each side selects an appraiser within 20 days; the two appraisers then choose an umpire. If they disagree, a court may appoint one.

• The appraisal award is binding on amount of loss—but not on coverage. You may still litigate whether mold remediation is covered.

Prompt Payment Penalties

If an insurer violates Chapter 542 deadlines, it owes statutory interest (10% per year) plus attorney’s fees. Recent Texas Supreme Court precedent (Barbara Technologies Corp. v. State Farm Lloyds, 2019) confirmed that payment after appraisal does not automatically negate PPCA damages.

Recent Court Decisions of Note

• Alvarado v. Lexington Ins. Co. (S.D. Tex. 2022): Denial of mold claim remanded to state court after insurer couldn’t prove the amount in controversy met federal jurisdiction, highlighting strategic filing considerations.

• Landy Lou, LLC v. State Farm Lloyds (Tex. 2020): The insurer’s immediate payment of an appraisal award did not preclude bad-faith claims when initial investigation was unreasonable.

Steps to Take After a Property Insurance Dispute

1. Document Everything Immediately

Take photos and video of all damage, including moisture meters showing high readings. Keep moisture-mapping reports and air-quality tests if mold is suspected.

2. Mitigate Further Damage

Texas policies require you to prevent additional loss. Hire a licensed water-remediation company to perform drying and containment. Retain invoices; they are reimbursable.

3. Obtain Independent Estimates

Secure at least two contractor bids. Request itemized, Xactimate-formatted estimates to compare line by line against the insurer’s scope.

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

If your carrier stalls beyond PPCA deadlines, file online with the TDI Consumer Protection Division. TDI will contact the insurer for a written response, often spurring faster action.

5. Preserve Communication Records

• Save emails, voicemail transcriptions, and letters.

• Confirm all phone conversations in writing via follow-up email.

• Request a certified copy of your policy (§ 542.551 Texas Insurance Code).

6. Evaluate Appraisal vs. Litigation

Appraisal can be efficient for pricing disagreements, but it will not resolve coverage denials (e.g., insurer says mold is excluded). Consult counsel before invoking appraisal, because some provisions waive your right to attorney’s fees if invoked too late.

7. Send a 60-Day Presuit Notice (For Weather-Related Claims)

Under Chapter 542A, you must provide detailed notice at least 60 days before filing suit. Failure to do so can limit your fee recovery.

8. File Suit Before Statutes Expire

Mark your calendar with the 2- and 4-year statutes of limitation. Courts strictly enforce them.

When to Seek Legal Help in Texas

You should consult a qualified attorney when:

• The carrier continues to lowball after you provide independent estimates.

• You receive a partial denial citing mold limitations or "wear and tear."

• Deadlines are approaching and you need a 60-day notice drafted.

• The insurer accuses you of fraud or misrepresentation.

Louis Law Group represents homeowners statewide and maintains relationships with Houston mold, water, and structural experts. We advance litigation costs and work on contingency—no fee unless we recover. Our attorneys are licensed in Texas, admitted to the Southern and Eastern District federal courts, and experienced in hurricane and mold litigation.

Local Resources & Next Steps

Texas Judicial Branch: Access Harris County district court dockets and appraisal-appointment motions. Houston Bar Association: Lawyer referral and limited free legal clinics. Texas State Law Library Insurance Guide: Statutes, regulations, and sample demand letters.

Next Step: Collect your policy, photos, and denial letters. Then call Louis Law Group at 833-657-4812 for a free case evaluation and policy review. We will analyze your claim, identify statutory violations, and outline a path to full recovery.

Disclaimer

This guide is for educational purposes only and does not constitute legal advice. Reading it does not create an attorney–client relationship. Consult a licensed Texas attorney regarding your specific situation.