Mold Damage & Texas Property Insurance Law: Houston Guide

Houston Homeowners’ Guide to Texas Property Insurance Law on Mold Damage

10 min read

Introduction: Why Understanding Your Rights Matters in Houston

For Houston homeowners, mold damage is more than an eyesore. It threatens your health, your home’s structural integrity, and your wallet. The humid Gulf Coast climate feeds mold growth after plumbing leaks, roof failures, or hurricane-driven flooding. When you file a property insurance claim, you expect prompt, full payment. Unfortunately, many policyholders experience delays, lowball offers, or outright denials. Knowing your rights under Texas law—especially the Texas Insurance Code and related regulations—gives you leverage against insurers that don’t play fair.

This comprehensive guide explains the legal framework, deadlines, and practical steps Houston residents must follow to protect their mold damage claims. From Prompt Payment of Claims statutes to appraisal clauses, we cover the essentials—so you can push back confidently and, when necessary, involve an experienced Houston insurance attorney.

Understanding Texas Property Insurance Law

Texas has some of the strongest consumer-oriented insurance statutes in the nation. Key provisions include:

• Texas Insurance Code Chapter 542 (Prompt Payment of Claims Act): Insurers must acknowledge a claim within 15 business days, start an investigation, and accept or deny the claim within 15 business days of receiving all required information. Failure can trigger 18% annual interest and attorneys’ fees.

• Texas Insurance Code Chapter 541 (Unfair Settlement Practices): Bars insurers from misrepresenting policy terms, failing to promptly settle valid claims, or engaging in unfair or deceptive acts.

• Texas Insurance Code Chapter 542A (Weather-Related Claims): Requires a 60-day pre-suit notice and allows insurers to elect to assume liability for adjusters—a strategic factor in hurricane or wind-driven rain cases.

• Texas Mold Assessment and Remediation Rules (16 Tex. Admin. Code §78): Regulate licensed mold remediators and define post-remediation verification requirements.

Because mold often stems from water breaches—roof hail, broken pipes, or hurricane surge—insurers may argue the mold is excluded or subject to sub-limits. However, many policies provide at least limited mold coverage when the underlying water damage is a covered peril. Texas courts narrowly construe exclusions against insurers, giving homeowners an important statutory advantage.

Common Property Insurance Disputes in Texas

Mold claims overlap with several dispute categories:

• Water Damage & Mold Growth: Pipe bursts and appliance leaks foster mold in walls and floors. Insurers often undervalue tear-out costs needed to access hidden moisture.

• Wind/Hail Roof Claims: Hail dents and wind uplift can compromise roof membranes, leading to slow leaks and mold in attics—yet insurers may blame “wear and tear.”

• Hurricane & Tropical Storm Losses: Houston’s exposure to storms like Harvey means policyholders fight about flood vs. wind coverage, salvage, and expensive mold remediation.

• Fire Losses with Suppression Water: Sprinklers and firefighter hoses saturate drywall; mold can arise during rebuild delays.

• Scope of Repair Disputes: Insurers approve superficial cleaning while homeowners know full removal down to studs is needed for safe re-build.

Texas Legal Protections & Recent Court Rulings

Several deadlines and case precedents shape mold litigation:

• Statute of Limitations: Breach of contract typically 4 years (Tex. Civ. Prac. & Rem. Code §16.004). Claims under Chapter 541 or the Deceptive Trade Practices Act (DTPA) are 2 years from discovery of the violation, potentially extendable to 2 + 180 days with good cause.

• Appraisal Clause: Standard Texas HO policies allow either party to demand appraisal when there’s a dispute over the amount of loss—not coverage. After written demand, each side names an appraiser within 20 days; the chosen appraisers pick an umpire. Appraisal awards are binding absent fraud or evidence the panel exceeded its authority (see State Farm Lloyds v. Johnson, 290 S.W.3d 886 (Tex. 2009)).

• Bad Faith Penalties: In USAA Texas Lloyds Co. v. Menchaca, 545 S.W.3d 479 (Tex. 2018), the Texas Supreme Court clarified that extra-contractual damages require an independent injury beyond policy benefits, but statutory interest and fees under Chapter 542 are available without proof of bad faith.

• Mold Exclusion Interpretation: Courts construe ambiguous exclusions in favor of coverage (Fiess v. State Farm Lloyds, 202 S.W.3d 744 (Tex. 2006)). While that case favored the insurer due to clear wording, it underscores how precise language controls—so read your policy carefully.

Step-by-Step Actions After a Mold Damage Dispute

Document Immediately

  - Take date-stamped photos and video of all mold growth, water stains, and damaged personal property.

  - Save plumber invoices, moisture readings, and any emergency dry-out bills.

Review Your Policy

  - Locate limitations on mold coverage—often $5,000 or $10,000 unless an endorsement increases limits.

  - Identify your duties after loss (notice, mitigation, proof of loss deadlines).

Notify the Insurer in Writing

  - Send notice via certified mail or email per policy. Under Chapter 542, the clock starts once the insurer receives notice.

  - Keep copies of every communication.

Mitigate Further Damage

  - Under Texas law and most policies, you must act prudently to stop mold spread—e.g., hire a licensed mold remediator for containment.

  - Track all costs; they are often reimbursable.

Obtain Independent Estimates

  - Contractors should write detailed line-item estimates using Xactimate or similar software for apples-to-apples comparison.

  - Include post-remediation testing to ensure your home is safe to re-occupy.

Demand Appraisal if Only Price Is Disputed

  - Send a written request citing the appraisal clause; propose an appraiser within 20 days.

  - Choose someone experienced in mold remediation pricing—not just general construction.

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

  If the insurer violates Chapter 542 or 541, file an online complaint with [Texas Department of Insurance](https://www.tdi.texas.gov). The agency will contact the insurer and often speeds up resolution.

Send a 60-Day Notice Letter Before Suing

  - Under Chapter 542A, detail every statutory violation, the amount owed, and reasonable attorney fees.

  - Failure to send this letter can postpone or jeopardize your lawsuit.

When to Seek Legal Help in Texas

You should involve a qualified property insurance attorney when:

• The insurer ignores deadlines or makes “take-it-or-leave-it” offers far below contractor estimates.

• You suspect bad faith—e.g., adjusters cherry-pick policy language or demand unnecessary documentation.

• Coverage is denied based on an exclusion you believe is ambiguous or inapplicable.

• Your appraisal award is ignored or undervalued.

• You face complex causation issues—wind vs. wear, pre-existing vs. new leaks.

Louis Law Group has a dedicated team licensed in Texas, well-versed in mold claims, appraisal enforcement, and bad faith litigation. Our lawyers front case costs, negotiate aggressively, and only get paid when you do. 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 – Dockets and opinions for state civil courts, including Harris County. Harris County Courts – Filing fees, local rules, and COVID-19 procedures. Houston Bar Association – Lawyer referral service and modest-means panel.

• Texas Department of Insurance Consumer Help Line: 800-252-3439.

• Texas State Bar, Client-Attorney Assistance Program: 800-932-1900.

Next, gather your claim file, repair estimates, and correspondence. Then, call Louis Law Group at 833-657-4812. Our attorneys will review your policy for hidden mold endorsements, calculate statutory interest owed, and outline litigation or appraisal strategies at no cost to you.

Legal Disclaimer

This guide is for informational purposes only and does not constitute legal advice. Reading it does not create an attorney-client relationship. Laws can change, and application varies by specific facts. Consult a licensed Texas attorney for advice about your particular situation.