El Paso Guide to Texas Property Insurance Law & Mold Claims

12 min read

Introduction: Why El Paso Homeowners Must Master Texas Property Insurance Law

From the winds that sweep in off the Franklin Mountains to the flash floods that race through the Rio Grande valley, El Paso homeowners confront unique weather and climate risks. While the region is famously dry, roof leaks after summer monsoon storms often lead to hidden moisture and mold growth. When that happens, policyholders frequently discover that getting fair treatment from their insurer can be harder than remediating the mold itself. Delays, lowball offers, and outright denials are common across Texas—but knowing your rights under Texas property insurance law can tilt the scales back in your favor.

This guide is written for El Paso residents who suspect, or already know, that their property insurance claim—especially a mold or water-related loss—has been delayed, underpaid, or denied. Below you will find:

• Key provisions of the Texas Insurance Code that protect policyholders;

• Statutory deadlines insurers must meet under the Prompt Payment of Claims Act;

• Practical, step-by-step actions to preserve your claim;

• When and how to demand appraisal, file a bad-faith suit, or engage legal counsel;

• Local El Paso and statewide resources—plus a direct number to seasoned attorneys who handle mold damage disputes statewide.

If your insurer is stalling or offering pennies on the dollar, you do not have to accept it. Keep reading, arm yourself with knowledge, and remember: If your claim has been delayed, underpaid, or denied, call Louis Law Group for a free case evaluation and policy review at 833-657-4812.

Understanding Texas Property Insurance Law

Texas Insurance Code Chapters 541 & 542

The backbone of homeowner protection in the Lone Star State is the Texas Insurance Code. Two chapters matter most when a claim turns contentious:

Chapter 541 – Unfair Methods of Competition & Unfair or Deceptive Acts This section defines—and prohibits—insurer conduct such as misrepresentation of policy language, failing to promptly provide a reasonable explanation for claim denials, or refusing to pay without a reasonable investigation. Violations open the door to additional damages and attorney’s fees. Chapter 542 – Prompt Payment of Claims Act (PPCA) Under §§542.055–.060, insurers must acknowledge, investigate, and pay or deny claims within strict time limits. Missing those deadlines exposes the carrier to 18% per-year interest on the amount owed plus reasonable attorney’s fees.

Full statutory text is available directly from the Texas Insurance Code.

Mold-Specific Statutes & Policy Endorsements

Unlike wind or fire damage, mold is often treated under special endorsements or exclusions. Since 2003, most Texas insurers issue HO-A or HO-B policies with sub-limits for mold remediation—commonly $5,000–$25,000—unless the homeowner buys an add-on. However, if mold results from a covered peril (e.g., a sudden pipe burst or roof leak during a monsoon storm), the water damage portion remains covered even if mold removal is capped.

Key takeaway: Insurers cannot deny water damage merely because mold formed later. They must separate covered water mitigation from any contractual mold cap.

Common Property Insurance Disputes in Texas

• Wind & Hail Roof Claims – Far West Texas may not face Gulf Coast hurricanes, but spring hailstorms pound El Paso rooftops. Disputes often center on matching shingles, depreciation, and code-upgrade costs.

• Mold & Hidden Water Damage – Swamp coolers, AC condensate lines, or a sudden monsoon downpour can saturate drywall and spawn mold colonies within 24-48 hours. Insurers frequently argue “long-term seepage” to avoid payment.

• Fire & Smoke Losses – Electrical fires in older adobe-style homes raise questions about smoke remediation and replacement cost vs. actual cash value (ACV).

• Foundation & Soil Movement – El Paso’s caliche soil expands and contracts; cracking slabs can spur fights over causation and policy exclusions for “settling.”

• Scope of Repair & Pricing Disputes – Even if coverage is accepted, carriers may use software like Xactimate to undervalue local labor rates.

Texas Legal Protections & Regulations

Statutory Deadlines Under the Prompt Payment of Claims Act

Insurer ObligationDeadline (Calendar Days) Acknowledge receipt of claim15 days (§542.055) Begin investigation15 days (§542.055) Accept or reject claim15 business days after receiving all items requested (extendable to 45 if weather-related) (§542.056) Pay accepted claim5 business days after notice of acceptance (§542.057)

Missed deadlines = statutory interest + fees.

Appraisal Clause

Most Texas policies include an appraisal provision that either party can invoke to resolve amount-of-loss disputes. Deadlines vary, but once invoked:

• Each side selects a competent appraiser within the timeframe stated (often 20 days).

• Appraisers attempt agreement; if they disagree, they select an umpire.

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

Under In re Universal Underwriters of Texas Ins. Co., 345 S.W.3d 404 (Tex. 2011), courts generally enforce appraisal clauses strictly.

Bad Faith & Extra-Contractual Damages

When an insurer unfairly refuses or delays payment, Texas recognizes a common-law cause of action for “bad faith,” first recognized in Arnold v. Nat’l County Mut., 725 S.W.2d 165 (Tex. 1987), and expanded by Universe Life Ins. v. Giles, 950 S.W.2d 48 (Tex. 1997). Potential remedies include mental-anguish damages and punitive damages up to twice the economic loss plus $750,000 under Tex. Ins. Code §541.152.

Statute of Limitations

• Contract claims (breach of policy): 4 years unless the policy shortens it to two years and one day (per §16.070 of the Texas Civil Practice & Remedies Code).

• Bad faith & Chapter 541 claims: 2 years from the date the unfair act occurred or was discovered.

Do not rely on the full four years; many policies shorten the window, so consult counsel early.

Steps to Take After a Property Insurance Dispute

1. Document Everything Immediately

Take dated photos of mold growth, water stains, and all personal property affected. Keep damaged materials until the adjuster sees them. Save all repair receipts.

2. Mitigate Further Damage

Texas policies require “reasonable and necessary” steps to prevent further loss. Hire an IICRC-certified mold remediator if needed and keep invoices. Mitigation costs are generally covered—even if the claim is later denied—so long as the initial cause is a covered peril.

3. Obtain Independent Estimates

Carriers may base offers on out-of-date pricing. Secure at least two bids from local El Paso contractors experienced with mold remediation. Present these in writing to the adjuster.

4. Review Your Policy Endorsements

Look for mold-limitation endorsements and depreciation clauses. Policies are contracts—exact language matters. If you need help deciphering exclusions, consider a coverage attorney.

5. Keep a Claim Diary

Note every phone call, email, and visit with your insurer: date, time, and summary of discussion. If deadlines lapse, your diary becomes evidence of PPCA violations.

6. Demand Appraisal for Pricing Disputes

If the carrier accepts coverage but refuses to pay the full cost, send written notice invoking appraisal. Use certified mail to establish the date.

7. File a Complaint with TDI

If negotiations stall, file an online complaint with the Texas Department of Insurance. TDI cannot force payment, but the inquiry pressures insurers to justify actions.

When to Seek Legal Help in Texas

You may manage a straightforward claim on your own, but consider hiring an attorney if:

• The insurer denies coverage outright, citing exclusions you believe do not apply.

• Deadlines in Chapter 542 have lapsed and you are owed statutory interest.

• The adjuster’s estimate is far below independent contractor bids.

• You uncover evidence of insurer misrepresentation or manipulation of expert reports.

• You face a shortened contractual limitation period and need to file suit quickly.

Louis Law Group represents policyholders statewide, including in El Paso County Courts at Law and the Western District of Texas federal court. Our attorneys are licensed in Texas, fluent in both English and Spanish, and have recovered millions for homeowners facing mold, hail, and fire disputes.

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 Judicial Branch – Docket information and self-help resources for county and district courts. El Paso Bar Association – Lawyer referral service if you need local co-counsel. Texas Department of Insurance – Consumer guides, complaint portal, and mold remediation regulations.

• El Paso County Clerk – File public records requests for permits and inspection reports that may prove damage origin.

• Texas RioGrande Legal Aid – Income-qualified legal assistance.

After you gather documentation, compare your insurer’s offer to actual repair costs. If there’s a gap—or if the carrier is silent past statutory deadlines—take the offensive.

Next step: Speak with an experienced El Paso insurance attorney who will fight for every dollar owed. Call Louis Law Group at 833-657-4812 or complete our online form for a free, no-obligation review.

Disclaimer

This guide is for general informational purposes only and does not constitute legal advice. Reading it does not create an attorney-client relationship with Louis Law Group or any of its lawyers. Laws and regulations change; consult qualified counsel about your specific circumstances.