Guide to Texas Property Insurance Law in San Antonio

11 min read

Introduction: Why San Antonio Homeowners Must Know Their Rights

San Antonio’s subtropical climate, frequent hailstorms, and occasional hurricanes funneling up the Gulf make property insurance claims a fact of life for local homeowners. Yet many residents are surprised when an insurer delays, underpays, or outright denies a valid claim. The Texas Insurance Code, prompt-payment statutes, and a strong body of case law give policyholders powerful leverage—if you know how to use it. This guide explains the essentials of Texas property insurance law from a slightly homeowner-friendly perspective, focusing on typical disputes in San Antonio. Whether you are dealing with wind damage, a burst pipe, or stubborn mold growth after heavy rain, the following information will help you preserve evidence, meet strict statutory deadlines, and decide when to escalate to appraisal or litigation.

Understanding Texas Property Insurance Law

Key Statutes Every Policyholder Should Know

• Texas Insurance Code Chapters 541 & 542 – Prohibit unfair claim settlement practices and set strict prompt-payment deadlines.

• Texas Deceptive Trade Practices Act (DTPA) – Allows treble damages for certain misrepresentations by insurers.

• Texas Property Code §5.008 – Covers seller disclosures but often intersects with insurance disputes about pre-existing conditions.

Under the Prompt Payment of Claims Act (Tex. Ins. Code Ch. 542), insurers must acknowledge a claim within 15 calendar days, commence an investigation, and request any necessary documents. They then have 15 business days (35 in certain catastrophes) to accept or reject the claim after receiving all requested items. Failure triggers interest at 18% per year plus attorney’s fees—an unusually stiff penalty that can push even hesitant insurers to settle.

Bad Faith & Extra-Contractual Liability

The Texas Supreme Court first recognized common-law bad faith in Arnold v. Nat’l County Mut. Fire Ins. Co., imposing liability for knowingly refusing to pay a valid claim. Today, Chapters 541 and 542 codify most bad faith standards, letting homeowners pursue additional damages when an insurer’s conduct is “knowingly” unfair or deceptive. Recent cases such as USAA Tex. Lloyds Co. v. Menchaca clarified the overlap between contract and extra-contractual claims: if the policy covers the loss and the insurer’s refusal causes independent injury, policyholders may recover beyond policy limits.

Common Property Insurance Disputes in Texas

• Wind & Hail Damage – South Texas is hail country. Disputes often center on roof age, pre-existing damage, or granular loss versus “functional damage.”

• Water & Mold Claims – A slow leak that spawns toxic mold may be covered if the policy includes “hidden or sudden discharge.” Carriers may argue wear-and-tear exclusions; homeowners must document the timeline and moisture readings.

• Hurricane & Tropical Storm Losses – San Antonio is inland, yet remnants of Gulf storms can dump double-digit rainfall. Wind-driven rain coverage hinges on roof or siding openings; flood damage requires separate NFIP policies.

• Fire & Smoke Losses – Total loss disputes often involve “actual cash value” versus “replacement cost” calculations under Tex. Ins. Code §862.053.

• Scope of Repair & Matching – Texas law does not mandate matching, but many policies contain clauses requiring uniform appearance. Disagreements on tile or shingle matching frequently head to appraisal.

Texas Legal Protections & Regulations

Statutory Deadlines You Cannot Miss

• Notice of Claim: Check your policy; 30–60 days is common. Under Tex. Ins. Code §542.051, late notice can reduce recovery only if it prejudices the insurer.

• Prompt-Payment Deadlines: 15 days to acknowledge, 15 business days to accept/reject, 5 days to pay after acceptance.

• Statute of Limitations: Most Texas policies shorten the normal four-year contract limitation to two years from the date of loss. Courts enforce these provisions if clearly stated.

• Appraisal Demand: Often must be invoked within 90 days of a disagreement on value or scope; failure can waive the right.

Penalties for Unfair Claims Handling

Under Chapter 542, the 18% statutory interest is mandatory once a violation is found. Chapter 541 and the DTPA allow actual and mental-anguish damages, plus up to treble damages if the insurer acted “knowingly.” Texas courts have awarded six-figure bad-faith verdicts, particularly where carriers ignored obvious storm damage or falsified engineering reports.

Recent Court Decisions Shaping Texas Insurance Law

• Barbara Techs. v. State Farm Lloyds (Tex. 2019) – Appraisal payments do not preclude Chapter 542 interest unless the insurer accepts liability before suit is filed.

• Hinojos v. State Farm Lloyds (Tex. 2019) – Post-appraisal payments may still trigger liability under Chapter 542 if initial underpayment caused delay.

• Causation Rulings – Courts have tightened requirements for experts to segregate covered hail damage from excluded wear-and-tear (Nat’l Lloyds v. Lowery).

Steps to Take After a Property Insurance Dispute

Document Immediately

• Photograph every room, roof slope, and exterior wall.

• Keep receipts for emergency mitigation—tarps, fans, dehumidifiers.

• Log communications with your adjuster: dates, names, and summaries.

Secure Independent Estimates

• Hire a licensed Texas contractor or public adjuster experienced with hail and water damage.

• Request Xactimate or similar line-item estimates to compare with the insurer’s scope.

• Consider mold air-quality testing if moisture exceeded 24–48 hours.

Review Policy Endorsements

• Check for mold sub-limits (often $5,000–$10,000) and extra coverage endorsements.

• Look at deductible type: wind/hail deductibles may be 1–2% of dwelling value.

File a Formal Complaint

If the insurer misses Chapter 542 deadlines, file a complaint with the Texas Department of Insurance (TDI).

• TDI usually responds within 14 days and can pressure carriers to re-evaluate.

Invoke the Appraisal Clause

• Send a written demand by certified mail. Each party selects an appraiser; they choose an umpire.

• The appraisal award is binding on value but not on coverage or bad faith issues.

Keep Statute of Limitations in Mind

• Litigation should be filed well before the two-year contractual period expires.

When to Seek Legal Help in Texas

Consult an attorney if the carrier’s offer does not cover reasonable repair costs, if you suspect falsified engineering reports, or if Chapter 542 deadlines pass without payment. A seasoned San Antonio insurance attorney can:

• Send a pre-suit notice letter under Tex. Ins. Code §541.154 and DTPA §17.505, tolling limitations for 60 days.

• Hire certified causation experts to link storm or water events to your damage.

• File suit in Bexar County District Court or remove to federal court if diversity exists.

Louis Law Group has recovered millions for Texas homeowners by leveraging prompt-payment penalties and negotiating favorable appraisal outcomes. Our attorneys are licensed in Texas and well-versed in local court procedures.

Local Resources & Next Steps

Texas Department of Insurance – File complaints, verify adjuster licenses, and access consumer guides. Bexar County District Clerk – Track lawsuits and download local rules. State Bar of Texas Lawyer Referral Service – Find qualified attorneys if you choose not to hire Louis Law Group. Lone Star Legal Aid – Free or low-cost assistance for income-qualified homeowners.

Next Steps: Compare your insurer’s estimate to independent bids, issue a timely appraisal demand if needed, and consult counsel before the two-year contractual statute runs.

Legal Disclaimer

This guide provides general information about Texas insurance law as of the publication date. It is not legal advice and does not create an attorney-client relationship. Consult a qualified attorney for advice specific to your situation.

Call to Action

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.