Frisco Guide to Texas Property Insurance Law & Mold Claims

11 min read

Introduction: Why Frisco Homeowners Must Know Their Insurance Rights

Frisco, Texas is one of the fastest-growing cities in the country, but with rapid development comes increased exposure to property risks. North Texas weather brings tornado-strength winds, spring hail, sudden cold snaps that burst pipes, and the persistent humidity that can spark hidden mold damage. Those perils, combined with rising reconstruction costs, have led to more frequent insurance disputes over claims that are delayed, underpaid, or flat-out denied. Understanding Texas property insurance law Frisco is no longer optional—it’s essential for protecting the equity in your home.

This guide, written for homeowners and policyholders in Frisco, explains the laws, deadlines, and practical steps you need to navigate a property damage dispute. We focus on mold claims because insurers often argue that mold is a non-covered "maintenance" issue, but the same legal principles apply to wind, hail, water, and fire losses. Every section is grounded in the Texas Insurance Code, Texas court precedents, and regulations enforced by the Texas Department of Insurance (TDI). When you finish reading, you will know exactly how to document your loss, demand prompt payment, invoke appraisal, and, if necessary, sue for bad faith—and you will see when to bring in a Frisco insurance attorney like Louis Law Group for experienced backup.

Understanding Texas Property Insurance Law

Key Statutes Every Policyholder Should Know

• Texas Insurance Code Chapter 542 (Prompt Payment of Claims Act) – gives insurers 15 days to acknowledge a claim, 15 business days to accept or deny after receiving full documentation, and obligates payment within 5 business days after acceptance.

• Texas Insurance Code Chapter 541 – prohibits unfair claim settlement practices and allows recovery of actual damages, treble damages for knowing violations, plus attorney’s fees.

• Texas Insurance Code Chapter 542A – specific to weather-related events (hail, wind, hurricanes). Imposes notice requirements and limits attorney’s fees only if the policyholder fails to provide pre-suit notice.

• Common-law Duty of Good Faith and Fair Dealing – recognized by the Texas Supreme Court in Arnold v. National County Mutual, 725 S.W.2d 165 (Tex. 1987), allowing extra-contractual damages when an insurer unreasonably denies or delays benefits.

How the Prompt Payment Act Protects You

Under Chapter 542, if your insurer waits too long to pay after liability becomes reasonably clear, it owes the amount of the claim plus 18% annual interest and reasonable attorney’s fees. That statutory interest adds real negotiating leverage, especially when smaller mold remediation invoices stretch into the thousands. Remember: if the carrier asks for additional documentation, the 15-business-day decision period restarts, but only once.

The Appraisal Clause

Most homeowners policies issued in Texas include an appraisal clause—essentially a private arbitration over the dollar amount of loss. Either side can demand appraisal in writing. While appraisal settles value, it cannot decide coverage (e.g., whether mold is excluded). Texas courts strictly enforce appraisal awards unless the policyholder can prove fraud or bias, as reaffirmed in State Farm Lloyds v. Johnson, 290 S.W.3d 886 (Tex. 2009). Therefore, timely invocation of appraisal can break a stalemate over scope or pricing and keep interest accruing.

Common Property Insurance Disputes in Texas

1. Wind and Hail Roof Damage

North Texas is hail alley. While insurers seldom deny that a storm occurred, they often argue that damage is "cosmetic" or under the deductible. When you see bruised shingles, granule loss, or water stains on ceilings, demand a joint inspection.

2. Water Damage & Burst Pipes

Texans learned in Winter Storm Uri (February 2021) that frozen pipes can devastate interiors. Insurers may approve drying costs but balk at mold remediation—yet secondary mold issues are typically covered if the initial water damage is covered.

3. Fire & Smoke Claims

Even small kitchen fires coat HVAC systems in soot. Disputes arise over cleaning vs. replacement. Under Texas law, ambiguous policy language is construed in favor of coverage (“contra proferentem”).

4. Hurricane & Tornado Losses

Frisco sits 300 miles from the Gulf but still receives remnant hurricanes and straight-line winds. Insurers may cite "named storm" deductibles. Check your declarations page.

5. Mold Damage (Our Spotlight Topic)

Many policies cap mold coverage at $5,000–$10,000, or require an endorsement. Yet if mold results from a covered peril (like a plumbing leak), full remediation may still be owed. The dispute usually centers on proximate cause—did the leak or poor maintenance cause the infestation? Texas courts place the burden on insurers to prove an exclusion applies.

Texas Legal Protections & Regulations

Statutory Deadlines That Can Make or Break Your Case

• Notice of Claim – most policies require notice "as soon as practicable" but Texas common law prevents denial unless prejudice is shown. Notify within 30 days to avoid argument.

• Insurer Response – 15 calendar days (acknowledge) + 15 business days (accept/deny) per Chapter 542.

• Payment Deadline – within 5 business days after acceptance; otherwise interest applies.

Statute of Limitations

  - Breach of contract: 4 years (Tex. Civ. Prac. & Rem. Code § 16.004).

  - Insurance Code/DTPA: 2 years + 180 days from discovery (Tex. Ins. Code § 541.162).

  - Common-law bad faith: 2 years, same as tort limitations.

• Appraisal Demand – no fixed deadline unless the policy specifies (many say within 60 days of disagreement). Texas courts bar unreasonable delay.

Bad Faith: What Counts in Texas?

The standard set out in Aranda v. Ins. Co. of N. Am., 748 S.W.2d 210 (Tex. 1988), requires proof that (1) the insurer’s liability is reasonably clear and (2) the insurer failed to settle or pay. Examples:

• Ignoring independent engineer reports that confirm roof damage.

• Requiring invasive testing for mold, then disregarding positive findings.

• Offering $2,000 on a $25,000 water loss without explanation.

Bad faith damages may include mental anguish, lost profits (e.g., if rental income is impaired), and punitive damages.

Recent Court Rulings Affecting Homeowners

In Barbara Technologies Corp. v. State Farm Lloyds, 589 S.W.3d 806 (Tex. 2019), the Texas Supreme Court held that payment of an appraisal award does not wipe out prior prompt-payment violations. Insurers often point to appraisal as a shield; the Court said it is no silver bullet—interest can still accrue. This ruling strengthened policyholder leverage, particularly in North Texas hail cases.

Steps to Take After a Property Insurance Dispute

1. Document Everything—Immediately

• Take date-stamped photos and video of all affected rooms, roof elevations, and exterior walls.

• Keep damaged materials (e.g., drywall cut-outs with visible mold) as physical evidence.

• Log every phone call with the adjuster: who, when, and substance discussed.

2. Obtain Independent Estimates

In mold cases, hire a licensed Texas mold assessment consultant (MAC) and a remediation contractor. Under Texas Department of Licensing & Regulation rules, a Mold Remediation Protocol and Certificate of Mold Damage Remediation (CMDR) must be issued. Provide these to your carrier as objective evidence.

3. Mitigate Damages

Texas policies impose a duty to prevent further loss. Place tarps, run dehumidifiers, or shut off water. Keep receipts; reasonable mitigation costs are reimbursable even if coverage is later disputed.

4. Invoke Appraisal When Scope or Price Is the Only Barrier

Send a written demand citing the policy’s appraisal clause. Name a competent, impartial appraiser familiar with Texas building codes and IICRC S520 (mold). If the insurer declines, that refusal itself can support a bad-faith claim.

5. File a Complaint with TDI

If the carrier blows statutory deadlines, file an online complaint with TDI’s Consumer Protection division. The agency will contact your insurer for a written response within 15 days. A documented regulatory complaint strengthens any later lawsuit.

6. Send a Statutory Demand Letter

Before filing suit under Chapters 541 or 542A, you must provide 60-day notice outlining the bad-faith acts and your damages. Failure to send notice can limit attorney’s fees. Use certified mail, return receipt requested.

When to Seek Legal Help in Texas

You can handle a straightforward claim yourself, but red flags justify calling a Frisco insurance attorney immediately:

• The adjuster blames "wear and tear" or "long-term leakage" without testing.

• Your estimate and the insurer’s differ by more than 25%.

• Payment is more than 60 days late with no valid explanation.

• You receive a Reservation of Rights letter citing multiple exclusions.

Louis Law Group represents Texas homeowners on a contingency fee—no recovery, no fee. Our attorneys are licensed under the State Bar of Texas and appear regularly in Collin and Denton County courts. We conduct on-site inspections, hire experts, and—if necessary—file suit in state or federal court within all applicable deadlines. Because mold damage disputes often involve low policy caps, we pursue extra-contractual damages to make you whole.

Local Resources & Next Steps

Texas Judicial Branch – docket search for Collin & Denton County District Courts. Collin County Clerk – property records to prove ownership and square footage. State Bar of Texas Lawyer Referral Service – verify attorney licenses. Texas Department of Insurance Consumer Help Line – 1-800-252-3439.

Next Steps for Frisco Homeowners

• Review your policy declarations for mold endorsements and deductibles.

• Schedule a professional moisture and mold assessment.

• Request a certified copy of your full policy from the insurer.

• Document communications and comply with all proof-of-loss deadlines.

• Call Louis Law Group if the carrier stalls, denies, or lowballs your claim.

CTA: If your property insurance claim has been delayed, underpaid, or denied, call Louis Law Group at 833-657-4812 for a free case evaluation and policy review today.

Legal Disclaimer: This article is for informational purposes only and does not create an attorney-client relationship. Laws change, and individual facts matter. Consult qualified counsel before acting on any information herein.