Dallas Guide to Texas Property Insurance Law & Mold Damage

11 min read

Introduction: Why Dallas Homeowners Need to Know Their Rights

Dallas sits at the very heart of North Texas’ humid subtropical climate. Spring hailstorms, torrential summer downpours, and the occasional Gulf-fueled hurricane remnant create a perfect breeding ground for water intrusions and, inevitably, mold. When mold damage strikes, many homeowners expect their insurer to step in promptly. Unfortunately, delays, underpayments, and outright denials are common in the Texas property insurance landscape. Understanding Texas property insurance law Dallas residents rely on is essential for safeguarding your largest investment—your home.

This guide empowers Dallas policyholders with practical, step-by-step strategies, a clear explanation of relevant statutes, and insight into court decisions that shape mold damage claims. While we use a homeowner-friendly tone, every statement is grounded in authoritative sources such as the Texas Insurance Code, Texas Department of Insurance (TDI) rules, and binding case law.

Common Mold Damage Scenarios in Dallas

• Hidden leaks from aging plumbing in Preston Hollow homes.

• Ridge-vent failures leading to attic mold in Lake Highlands properties.

• Roof hail strikes causing slow water intrusion and mold growth in South Dallas.

Whether the cause is a sudden burst pipe or long-term seepage, insurers often argue that mold is a maintenance issue. Yet Texas courts have repeatedly clarified that when the underlying water event is covered, resulting mold remediation is usually covered as well (Fiess v. State Farm Lloyds, 202 S.W.3d 744 (Tex. 2006)). Knowing your rights under both the policy and Texas law is the first step toward full recovery.

Understanding Texas Property Insurance Law

Key Statutes Every Dallas Homeowner Should Know

Texas Insurance Code Chapter 542 – Prompt Payment of Claims Act (PPCA)

  - 15 calendar days to acknowledge your claim (extended to 30 days after a declared catastrophe).

  - 15 business days to accept or deny after receiving all required documents (may extend to 45 days with proper notice).

  - 5 business days to pay after agreeing to pay.

  - Penalty interest of 18% per year plus attorney’s fees for late payment.

Texas Insurance Code Chapter 541 – Unfair Settlement Practices

  - Prohibits misrepresenting policy terms, failing to conduct reasonable investigations, or refusing prompt settlements.

  - Allows treble (triple) damages when insurers act knowingly.

• Civil Practice & Remedies Code §16.004 – Four-Year Breach of Contract Limitations

• Two-Year Statute for deceptive practices and bad faith (Tex. Ins. Code §541.162).

The Policy Itself

Most Texas HO3 and HO5 homeowner policies place a dollar cap on mold remediation—often $5,000. However, Dallas policyholders can purchase endorsements raising that limit or removing it. Even without an endorsement, you still may recover up to the cap plus full repair of any covered water damage. Carefully review your coverage A (dwelling) and coverage B (other structures) sections for exclusions and sub-limits.

Texas courts interpret exclusions narrowly and coverage grants broadly, favoring insureds when ambiguities exist (Nautilus Ins. Co. v. Country Oaks Apartments, 566 S.W.3d 258 (Tex. 2018)). That pro-policyholder doctrine can be decisive in mold cases where wording is ambiguous.

Common Property Insurance Disputes in Texas

While mold claims are front and center in this guide, Dallas homeowners should recognize other frequent disputes that often overlap with or lead to mold growth:

• Wind & Hail Damage – Dallas led the state in hail claims in 2022. Roof breaches frequently cause hidden water intrusion and mold colonies.

• Water Damage from Plumbing Failures – Cast-iron pipes in older East Dallas homes corrode, causing slow leaks insurers label as “repeated seepage.”

• Hurricane & Tropical Storm Rain – Though 250 miles inland, Dallas receives heavy rain bands producing flash floods and attic leaks.

• Fire and Smoke Losses – Firefighting water saturation often spawns mold within 48 hours if not dried properly.

• Scope of Repair Disputes – Insurers sometimes agree to pay but undervalue labor, fail to include code upgrades, or refuse full mold remediation protocols (negative air, HEPA filtration, post-clearance testing).

Each dispute type triggers unique deadlines and evidentiary burdens. Yet the foundational strategy remains: document, document, document.

Texas Legal Protections & Regulations

Statutory Deadlines & Notice Requirements

• Initial Notice of Loss: Report damage “promptly.” Insurers cannot deny solely for late notice unless prejudiced (Tex. Ins. Code §542A.006).

• Pre-Suit Notice: For claims under Ch. 542A, homeowners must give 60 days’ written notice before filing suit, stating the amount owed and attorney’s fees.

• Appraisal Demands: Most policies demand appraisal within 20 days of either party’s request. Recent case law (Ortiz v. State Farm Lloyds, 589 S.W.3d 127 (Tex. 2019)) affirms appraisal awards are binding on amount of loss but not on liability or bad faith issues.

Bad Faith & Extra-Contractual Damages

Even if an insurer pays the appraisal award, it may still face bad faith liability for prior delay, lowballing, or inadequate investigation. Courts analyze whether the insurer had a “reasonable basis” for its conduct at the time of decision (USAA Tex. Lloyds Co. v. Menchaca, 545 S.W.3d 479 (Tex. 2018)). For Dallas homeowners, preserving communications and inspection notes is critical to proving unreasonable conduct.

Recent Dallas-Area Court Trends

• The Northern District of Texas enforces Ch. 542A’s bar on joining individual adjusters when the insurer accepts liability, streamlining removal to federal court.

• Texas appellate courts continue to uphold 18% PPCA interest even after insurers pay during litigation (Barbara Techs. v. State Farm, 589 S.W.3d 806 (Tex. 2019)).

Steps to Take After a Property Insurance Dispute

Document Immediately

  - Photograph and video all visible mold, moisture stains, and involved materials.

  - Keep samples of damaged drywall or carpet if safe to do so.

  - Maintain a written log of every conversation—date, time, representative name, and summary.

Mitigate Further Damage

  - Hire an IICRC-certified water mitigation company within 24–48 hours. Reasonable mitigation costs are recoverable.

  - Do not discard materials until the insurer inspects or waives inspection in writing.

Secure Independent Estimates

  - Dallas contractors familiar with *Xactimate* software can provide line-item estimates that match industry pricing.

  - Request a mold protocol and post-remediation clearance testing plan.

Request a Copy of Your Policy

  - Texas Insurance Code §542.019 entitles you to a free certified copy upon request.

  - Review endorsements for mold limits and anti-concurrent causation clauses.

File a Complaint with TDI

If the insurer drags its feet, file an online complaint with the Texas Department of Insurance Consumer Protection Division. Attach estimates, photos, and all correspondence.

Consider Invoking Appraisal

If you and the insurer disagree on the amount of loss, send a written demand for appraisal pursuant to the policy’s conditions. Select an impartial, knowledgeable appraiser—retired adjusters or licensed Public Insurance Adjusters (PIAs) can be effective. The umpire must be neutral; avoid conflicts of interest.

Preserve All Emails & Texts

Texas e-discovery rules allow recovery of text messages. Screenshot and save them in case litigation ensues.

When to Seek Legal Help in Texas

While many claims resolve without litigation, mold disputes often cross the line into bad faith territory. You should contact a qualified Dallas insurance attorney when:

• The insurer denies coverage based on an exclusion you believe does not apply.

• Payment is far below independent estimates, and appraisal is refused or delayed.

• The claim remains unresolved beyond statutory PPCA deadlines.

• You receive a confusing “reservation of rights” letter questioning liability.

• The insurer asserts the damage is “long-term seepage” without evidence.

How Louis Law Group Can Help

Louis Law Group’s Texas-licensed attorneys focus exclusively on Texas property damage claims. We:

• Conduct a free policy review detecting hidden mold coverage.

• Send statutory demand letters that stop delay tactics and trigger penalty interest.

• Hire industrial hygienists and construction experts to strengthen your case.

• Pursue breach of contract, PPCA, and bad faith claims in state or federal court.

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 Judiciary Case Search – Track ongoing insurance litigation in Dallas County. Dallas Bar Association Lawyer Referral Service – Verify attorney licensing and discipline. TDI Complaint Index – Compare insurer complaint ratios before renewal.

• Dallas County District Clerk – File suit for claims exceeding $200,000; small claims under $20,000 go to Justice Court.

• Legal Aid of Northwest Texas – Offers income-based assistance for low-income homeowners.

Statute of Limitations Recap

• Four years for breach of contract.

• Two years for bad faith and unfair practices (may be tolled by discovery rule).

• One year to demand appraisal in some policies—verify yours.

Attorney Licensing Requirements

Any lawyer handling your claim must be licensed by the State Bar of Texas, carry malpractice insurance if practicing through a firm, and comply with Texas Disciplinary Rules of Professional Conduct. Out-of-state attorneys require pro hac vice admission and local counsel.

Conclusion & Call to Action

Mold damage claims in Dallas can escalate quickly from a minor leak to a major battle with your insurer. Texas law gives you robust tools—strict payment deadlines, appraisal rights, and penalty interest—to level the playing field. Use them.

Louis Law Group is ready to enforce your homeowner insurance dispute Texas rights. Call 833-657-4812 or fill out our contact form today for a no-cost consultation.

Disclaimer: This guide is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for advice specific to your situation. Past results do not guarantee future outcomes.