Mold Damage Claims Guide: Texas Property Insurance Law San Antonio

Estimated read time: 13 min read

Introduction: Why San Antonio Homeowners Need a Mold Damage Claims Guide

Central Texas weather can be brutally hot in summer, followed by sudden downpours that test any roof or plumbing system. In San Antonio, mold often follows quickly after a hidden water leak, hurricane-related flooding, or poorly ventilated attic. While most homeowners purchase property insurance to protect against these perils, many are shocked when insurers delay, underpay, or outright deny legitimate mold damage claims. Understanding Texas property insurance law and your rights as a policyholder is therefore essential. This guide—written with the interests of San Antonio homeowners in mind—explains the legal landscape, the claims process, and the strategic steps you can take to maximize coverage.

Whether you are facing musty odors behind drywall, visible fungal growth along baseboards, or health-related concerns, mold remediation is expensive. Texas insurers frequently contest whether mold was caused by a covered peril or by “maintenance issues.” Knowing the difference, gathering proper documentation, and invoking the correct statutory remedies can determine whether you pay thousands out-of-pocket or receive the benefits you paid premiums for.

If your mold damage claim has been delayed, underpaid, or denied, keep reading. Then call Louis Law Group at 833-657-4812 for a free case evaluation and policy review.

Understanding Texas Property Insurance Law

Key Statutes That Protect Policyholders

• Texas Insurance Code Chapter 542 – Prompt Payment of Claims Act: Requires insurers to acknowledge, investigate, and pay or deny claims within strict deadlines or face statutory interest and attorney’s fees.

• Texas Insurance Code Chapter 541 – Unfair Settlement Practices: Allows homeowners to sue for treble damages if an insurer knowingly engages in bad faith conduct such as misrepresenting policy provisions or failing to conduct a reasonable investigation.

• Texas Property Code § 5.008: Governs seller disclosure of previous water penetration and mold, helpful when dealing with insurers who argue mold predates the policy period.

• Texas Civil Practice & Remedies Code § 16.070: Restricts attempts by insurers to shorten the general two-year statute of limitations for breach-of-contract actions.

For an overview of Texas insurance statutes, visit the Texas Insurance Code online.

Prompt Payment Deadlines

• 15 days to acknowledge receipt of your claim and request any additional information.

• 15 business days after receiving requested information to accept or reject the claim.

• 5 business days after agreeing to pay to actually issue payment.

If the insurer violates any of these windows, Chapter 542 mandates they pay interest (currently 18% per annum) plus reasonable attorney’s fees—powerful leverage for homeowners facing slow responses.

Common Property Insurance Disputes in Texas

Although this guide focuses on mold damage, understanding other dispute categories helps when multiple perils overlap (e.g., roof hail damage followed by interior mold).

• Wind and hail (frequent in spring and early summer) that breach roofing systems, allowing moisture intrusion.

• Water damage from burst pipes during rare San Antonio freezes, or from plumbing failures in older homes.

• Hurricane and tropical storm flooding, particularly from remnants that sweep inland from the Gulf.

• Fire losses that lead to water-based extinguishing efforts, which can foster post-event mold.

• Scope of repair disagreements—insurers may propose partial drywall removal or cheap antifungal sprays rather than full remediation to IICRC standards.

Because mold often develops after a covered water event, insurers attempt to distinguish between primary and secondary damage to limit payouts. Texas courts, however, have held that when mold is a foreseeable result of a covered peril, the loss is compensable. For example, in Fiess v. State Farm Lloyds, 202 S.W.3d 744 (Tex. 2006), the Texas Supreme Court interpreted policy exclusions narrowly, although it ultimately ruled for the insurer due to specific wording. The takeaway: policy language matters—closely review endorsements that might restore mold coverage.

Texas Legal Protections & Recent Court Rulings

Statutory Deadlines You Must Know

ActionDeadline File lawsuit for breach of contract/bad faithGenerally 2 years from date of denial (may be extended by written agreement) Demand appraisal under policyUsually "within a reasonable time"—best practice is within 30–60 days of dispute File Texas Dept. of Insurance complaintNo statutory limit, but do so promptly to preserve leverage

Appraisal Clause: Binding but Limited

Most Texas homeowner policies contain an appraisal clause allowing either party to demand an impartial panel to set the amount of loss. Important features:

• Timeframe: Policies often say 20 days to name an appraiser after demand. Mark your calendar.

• Scope: Appraisal decides amount but not coverage. If the insurer denies mold entirely, you may need litigation.

• Costs: Each side pays its appraiser; the umpire fee is split.

Recent case law (Ortiz v. State Farm Lloyds, 589 S.W.3d 127 (Tex. 2019)) confirms that policyholders can still sue for bad faith and statutory damages after appraisal if the insurer unreasonably delayed or underpaid prior to the award.

Bad Faith and Extra-Contractual Damages

If an insurer knowingly misrepresents the policy, fails to conduct a reasonable investigation, or delays payment without good cause, homeowners can recover up to three times actual damages under Chapter 541. Coupled with 18% interest under Chapter 542, this often turns lowball offers into significant liability for the insurer.

Steps to Take After a Property Insurance Dispute

1. Document the Mold Thoroughly

• Take timestamped photos and video of every affected area, including HVAC vents, baseboards, and attics.

• Keep samples of damaged materials if safe to do so.

2. Obtain Independent Professional Assessments

• Hire a licensed Texas mold assessor or industrial hygienist to produce a protocol.

• Secure at least two remediation estimates following IICRC S520 standards.

3. Mitigate Further Damage

Texas policies require you to prevent continuing loss. Use fans or dehumidifiers and keep all receipts. Reasonable mitigation costs are typically reimbursable.

4. Keep a Claim Diary

Record every call, email, adjuster visit, and deadline. This timeline becomes evidence if litigation ensues.

5. Invoke Appraisal Early If Only the Amount Is Disputed

Submit a written demand citing the specific policy paragraph. Name an experienced appraiser familiar with mold scopes.

6. File a Complaint With the Texas Department of Insurance (TDI)

The TDI can pressure insurers and create a paper trail. File online at the official TDI complaint portal.

7. Consult a San Antonio Insurance Attorney

When coverage is denied or delays drag on past statutory deadlines, legal counsel levels the playing field.

When to Seek Legal Help in Texas

You should contact an attorney:

• As soon as a coverage denial letter arrives—do not rely solely on the insurer’s interpretation.

• If 60 days have passed without payment despite clear liability.

• When the insurer blames “maintenance issues” despite evidence of a sudden and accidental water event.

• If your claim is large (over $30,000) or involves health-related mold exposure.

Louis Law Group represents Texas homeowners exclusively on a contingency-fee basis. Our attorneys are licensed in Texas and familiar with Bexar County courts. We prepare Notice Letters that satisfy Texas Insurance Code pre-suit requirements, demand prompt payment interest, and pursue appraisal or litigation as strategic.

Local Resources & Next Steps for San Antonio Residents

Texas Department of Insurance – File consumer complaints and review insurer disciplinary history. Bexar County District Clerk – Search existing lawsuits and file new civil actions. San Antonio Bar Association – Lawyer referral service if you need additional local counsel.

• Texas Mold Assessors and Remediators List – Obtain licensed professionals through TDLR.

Ready to protect your home and health? 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. We fight for San Antonio homeowners.

Disclaimer: This guide is for informational purposes only and does not constitute legal advice. Reading it does not create an attorney-client relationship. Louis Law Group is licensed to practice law in Texas. Past results do not guarantee future outcomes. Attorney advertisement.