Texas Homeowners Insurance Laws

If you’re a homeowner in Texas, you know that severe weather strikes every year. Whether it be a hurricane, tornadoes, ice storms, or hail, Texas homeowners often face the chance of property damage. Not only do they need good homeowners’ insurance, but they also need to understand the laws that are in place to protect them.

Texas homeowners' insurance laws are a shield against insurance company delays, denials, and bad-faith practices. These consumer protections have real teeth, and understanding your rights under Texas law can mean the difference between a fair settlement and a prolonged fight. If your insurance company isn't playing by the rules, our Texas insurance lawyers can help you enforce your rights and secure the compensation you're owed.

What Your Texas Homeowners Insurance Typically Covers

Before diving into the legal protections, it's essential to understand what most homeowners' insurance policies in Texas provide. Standard homeowners insurance coverage includes five key components that work together to protect your property and finances.

• Dwelling coverage: protects the structure of your home itself, including attached structures like garages. This coverage helps pay for repairs or rebuilding if covered perils like fire, windstorms, or hail coverage events damage your home.
• Personal property coverage: protects your belongings inside the home, with everything from furniture and clothing to electronics and appliances. Most policies cover personal property for a percentage of your dwelling coverage amount.
• Other structures coverage: extends protection to detached structures on your property, such as separate garages, sheds, fences, and other buildings not connected to your main house.
• Liability coverage: protects you if someone is injured on your property or if you accidentally cause property damage to others. This coverage can help pay for legal costs and damages if you're sued.
• Additional living expenses (ALE): coverage pays for temporary housing and increased living costs if you're displaced from your home due to a covered loss. This can include hotel bills, restaurant meals, and other expenses above your normal cost of living.

It's worth noting that flood insurance claims require a separate policy, as standard homeowners insurance doesn't cover flood damage. Similarly, if you live in some coastal regions, you may need windstorm coverage through the Texas Windstorm Insurance Association.

Texas Insurance Laws That Protect Homeowners

Texas has enacted comprehensive laws specifically designed to protect homeowners from unfair insurance practices. These laws are enforced by the Texas Department of Insurance and carry significant penalties for insurance companies that violate them.

Prompt Payment Requirements: Your Right to Quick Action

One of the most powerful protections in Texas law is the prompt payment statute found in Texas Insurance Code Chapter 542. This law requires insurance companies to act quickly on your claim, with specific deadlines that must be met.

When you file an insurance claim, your insurance company has exactly 15 days to acknowledge receipt of your claim. During this time, they must also begin investigating your claim and request any additional documentation they reasonably believe they'll need.

Once your insurance carrier receives all the requested information, they have 15 business days to either accept or reject your claim. If they accept your claim, payment must follow within five business days.

The consequences for violating these deadlines are severe. Insurance companies that delay payment beyond the statutory timeframes must pay 18% annual interest on the claim amount, plus the policyholder's attorneys' fees.

Texas Windstorm Insurance Association: Coastal Protection

For homeowners along the Texas coast and parts of Harris County, the Texas Windstorm Insurance Association (TWIA) serves as the insurer of last resort for wind and hail damage. TWIA was created because many private insurance companies won't provide windstorm coverage in these high-risk coastal areas.

TWIA provides essential coverage when your mortgage lender requires windstorm insurance, but private insurers won't offer it. The association covers properties in 14 coastal counties and specific parts of Harris County east of Highway 146. However, you can't simply choose TWIA — you must first be denied coverage by a private insurance company to qualify.

TWIA won't sell you a policy if there's already a hurricane in the Gulf of Mexico, so coastal homeowners must plan ahead and secure coverage during calm weather periods.

Consumer Bill of Rights: Know Your Protections

The Texas Department of Insurance requires insurance companies to provide every policyholder with a Consumer Bill of Rights. This document outlines fundamental protections that most homeowners may not realize they have.

You have the right to receive a written explanation if your claim is denied or your policy is cancelled. The insurance company cannot simply reject your claim without providing detailed reasons for their decision. You also have the right to contact the Texas Department of Insurance for help with complaints or questions about your coverage.

Perhaps most importantly, you have the right to hire an attorney or public adjuster to help with your claim. Insurance companies cannot penalize you for seeking professional help when navigating complex claims processes.

Restrictions on Claims History Discrimination

Texas law protects homeowners from being penalized for claims beyond their control. Insurance companies generally cannot increase your premiums or cancel your policy based solely on claims caused by natural disasters that didn't result in a payout.

Your credit history can influence insurance rates in Texas, but insurance companies cannot deny coverage based solely on poor credit. They must consider multiple factors when determining your risk profile and premium costs.

Cancellation and Non-Renewal Rules: Your Right to Fair Treatment

Texas law strictly regulates when and how insurance companies can terminate your coverage. After your policy has been in effect for 60 days, your insurance company can only cancel it for specific reasons: non-payment of premiums, filing a fraudulent claim, or a hazard increase that you control, which raises your risk.

For cancellation, insurance companies must provide 10 days' written notice before the effective date. For non-renewal, they must give you 60 days' notice before your policy period ends, giving you adequate time to find alternative coverage.

Insurance companies cannot refuse to renew your policy simply because your home is old or because of your marital status. These factors alone are not valid grounds for non-renewal under Texas law.

How to Manage Your Insurance Claim

Understanding the claims process can help you protect your rights and secure fair compensation when property damage occurs. Here's how to handle your claim while keeping Texas law in mind.

• Document everything thoroughly from the moment damage occurs. Take photos and videos of all damage. Create a written inventory of damaged items, noting their age and value. This documentation is crucial if a dispute arises.
• Give notice promptly to your insurance company as soon as possible after discovering damage. Most policies require "prompt" notice, and delays could be used to deny your claim.
• Cooperate with the adjuster while protecting your interests. The adjuster will inspect your property and estimate costs. Be present during the inspection and point out all damage. Remember, the adjuster works for the insurance company, not for you.
• Handle repairs carefully to prevent further damage. Avoid making permanent repairs before the adjuster inspects the property, as this could be grounds for a claim denial.
• Address denials or delays aggressively if they occur. File a complaint with the Texas Department of Insurance, demand a written explanation, or consult an attorney about potential bad faith practices..

If you're experiencing delays or disputes with your mortgage company, the Omar Ochoa Law Firm can help with these complex situations, ensuring your rights are protected and that funds are released promptly so you can get your home back to normal.

Know Your Rights and Protect Your Home

Texas homeowners' insurance laws provide substantial protection, but only if you understand and enforce your rights. These laws exist because insurance companies don't always act in their policyholders' interests. They're businesses focused on minimizing payouts and maximizing profits.

The goal isn't to fight with your insurance company, it's to ensure you receive the fair treatment and prompt payment you've paid for through your premiums. If you believe your insurance company isn't fulfilling its obligations, schedule your free case review today to discuss your rights and explore your options.