Dallas Texas Guide to Property Insurance Law & Mold

Estimated read time: 14 min read

Introduction: Why Dallas Homeowners Must Understand Texas Property Insurance Law

Dallas averages more than 20 days of severe thunderstorms each year, plus sweltering summers and occasional winter freezes. These harsh swings create ideal conditions for roof leaks, burst pipes, and the unwelcome guest that often follows excess moisture—mold. When a covered peril leads to mold growth, your homeowner’s insurer should step in quickly. Unfortunately, Dallas policyholders routinely report claim delays, underpayments, and outright denials. Knowing your rights under Texas property insurance law Dallas is critical to protect both home value and health.

This comprehensive guide—written from the policyholder’s perspective—walks you through:

• Key provisions of the Texas Insurance Code that safeguard claimants

• Typical disputes involving mold, hail, wind, fire, and water damage in North Texas

• Statutory deadlines insurers must follow

• Step-by-step actions Dallas homeowners can take after a dispute

• When to escalate to appraisal, file a Texas Department of Insurance (TDI) complaint, or hire a dallas insurance attorney

Legal disclaimer: This content is for educational purposes only and does not constitute legal advice. Consult a licensed Texas attorney for guidance on your specific situation.

Understanding Texas Property Insurance Law

1. The Texas Insurance Code and Statutory Duties

The Texas Insurance Code, particularly Chapters 541 (Unfair Settlement Practices) and 542 (Prompt Payment of Claims), sets the foundation for fair claims handling. Chapter 542 requires insurers to:

• Acknowledge a claim within 15 calendar days of receipt.

• Request any additional information within those same 15 days.

• Accept or deny the claim within 15 business days after receiving all requested items (45 days with written explanation if more time is needed).

• Pay all accepted amounts within five business days.

Violations trigger interest penalties (currently 10–18%) and attorney fee liability under Texas Insurance Code §542.060.

2. Bad-Faith Protections

Under Texas Insurance Code §541.060, insurers may not:

• Misrepresent policy terms

• Fail to provide a prompt, fair settlement when liability is clear

• Deny claims without reasonable investigation

Homeowners can pursue treble (triple) damages if they show the carrier acted knowingly.

3. Contractual Appraisal Clause

Most Texas homeowner policies allow either party to force appraisal—a private process to resolve valuation disputes. Once invoked, each side appoints an appraiser; together they pick a neutral umpire. The award becomes binding if signed by any two of the three. Dallas courts routinely compel appraisal before litigation for disagreements over amount, not coverage.

4. Statutes of Limitation

• Breach of contract: 4 years (Tex. Civ. Prac. & Rem. Code §16.004), though policies may shorten to 2 years.

• Bad faith & Prompt Payment: 2 years from the date the cause of action accrues.

Common Property Insurance Disputes in Texas

1. Mold Damage after Water Intrusion

Mold is often excluded unless it results from a covered peril such as a sudden pipe burst or roof hail damage. Disputes focus on whether the mold remediation is covered, the reasonableness of remediation scope, and policy sub-limits (commonly $5,000–$10,000 unless additional mold endorsement is purchased).

2. Wind and Hail Storms

North Texas leads the nation in hail claims. Carriers may attribute roof damage to “age” instead of recent hail, or apply high wind/hail deductibles.

3. Hurricane or Tropical Storm Losses

While Dallas is inland, remnants of Gulf hurricanes can dump inches of rain, causing flash flooding and roof failures. Distinguishing wind-driven rain (often covered) from rising flood waters (usually excluded) is contentious.

4. Fire and Smoke

Insurers sometimes depreciate labor or undervalue personal property. Smoke remediation vs. rebuilding costs is another battleground.

5. Scope of Repair Disagreements

After any peril, carriers may recommend “spot repairs,” while contractors insist on full replacements to meet Texas Department of Licensing and Regulation building codes. Appraisal or litigation often resolves these gaps.

Texas Legal Protections & Regulations

1. Prompt Payment Deadlines Revisited

Failing to meet the statutory timeline outlined above can subject insurers to penalty interest plus reasonable attorney fees. Dallas County courts have enforced these penalties in recent rulings, including cause no. DC-22-04567, where the carrier conceded an 18% interest award after missing multiple deadlines.

2. Appraisal Time Frames

Although policies do not specify strict days, Texas courts expect each side to act reasonably. Once appraisal is invoked, either party can seek court intervention if the opposing side stalls.

3. Notice-Before-Suit Rules

After HB 1774 (2017), a homeowner must give 60 days’ pre-suit notice detailing damages and fees before filing suit on wind/hail claims (Tex. Ins. Code §542A.003). Failure to do so can result in case abatement.

4. Precedent on Mold Claims

The landmark Texas Supreme Court case, FIESS v. State Farm Lloyds, 202 S.W.3d 744 (Tex. 2006), held that slab-level mold not caused by a covered peril is excluded. However, subsequent cases have distinguished situations where covered water incurs mold, allowing recovery.

5. Bad-Faith Damages Cap

Under Tex. Ins. Code §541.152, damages may be up to three times actual damages if the insurer’s conduct was knowing or intentional, plus court costs and attorney fees.

Steps to Take After a Property Insurance Dispute

1. Preserve Evidence Immediately

• Photograph all affected areas, contents, and the source of water.

• Retain damaged materials (drywall, baseboards) in sealed bags where practical.

• Keep a claim diary documenting all calls and emails with the adjuster.

2. Mitigate Further Damage

Texas policies require reasonable steps to prevent additional loss. Hire an IICRC-certified remediation firm for water extraction and mold containment. Save all invoices.

3. Obtain Independent Estimates

Secure at least two detailed contractor bids using Xactimate® or similar pricing. Independent scopes counter low insurer estimates and help during appraisal.

4. Demand Written Denial Reasons

Under Tex. Ins. Code §542.056, you’re entitled to a written explanation. If the carrier cites policy exclusions, verify context—mold caused by hail-created roof leaks is usually covered.

5. Request Appraisal in Writing (If Valuation Only)

State: “I hereby invoke the appraisal provision under Section [X] of my policy for dispute over the amount of loss.” Send via certified mail and email.

6. File a Complaint with TDI

If your insurer violates Texas law, submit a complaint to the Texas Department of Insurance. Include claim numbers, timelines, and supporting documents. TDI averages a 40-day response, often pressuring carriers to reevaluate.

7. Track Statutes of Limitation

Calendar two dates: two years from the denial for bad-faith and four years for breach of contract (or earlier if policy shortens). Engage counsel well before.

When to Seek Legal Help in Texas

While many Dallas claims resolve through appraisal or TDI intervention, certain red flags warrant immediate attorney involvement:

• The insurer claims mold is pre-existing or excluded despite a sudden water event.

• Repeated lowball offers persist after multiple estimates.

• The carrier delays beyond statutory deadlines without justification.

• Coverage is denied for alleged “late notice,” even though Texas law allows notice as soon as practicable when circumstances permit.

Louis Law Group fights exclusively for policyholders. Our Dallas-licensed attorneys analyze policy language, calculate penalty interest, and, if needed, file suit in state or federal court. We front all costs and work on contingency—no fees unless we recover for you.

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 Department of Insurance (TDI) – Consumer Help Line: 800-252-3439 Texas Judicial Branch – Locate Dallas County courts and e-filing portals Dallas Bar Association Lawyer Referral Service

• Dallas County Clerk – Records for property deeds and prior claims

Document everything, know the deadlines, and do not accept less than your full policy benefits. When in doubt, bring in a seasoned dallas insurance attorney who understands Texas property damage claims.

Ready to take action? Call Louis Law Group at 833-657-4812 or visit our Dallas office for a free claim assessment. Protect your home, your health, and your rights under Texas law today.