Mold Damage & Texas Property Insurance Law in San Antonio

Estimated read time: 15 min read

Introduction: Why Knowing Your Rights Matters in San Antonio

San Antonio’s humid subtropical climate, heavy spring rains, and occasional hurricanes that sweep up the Gulf combine to make mold damage one of the most common – and most hotly contested – property insurance claims in the city. Local homeowners routinely face claim delays, underpayments, and outright denials when they seek coverage for mold remediation, water extraction, and related repairs. Because Texas law offers powerful – but deadline-driven – consumer protections, understanding your rights is essential to safeguarding the value of your home and avoiding out-of-pocket cleanup costs.

This guide draws on the Texas Insurance Code, prompt-payment statutes, and recent court decisions to give San Antonio policyholders a practical roadmap for navigating mold damage claims. While the content favors homeowners, it remains grounded in authoritative sources and aims to equip you with the legal tools needed to hold insurers accountable.

Understanding Texas Property Insurance Law

Key Statutes Protecting Policyholders

• Texas Insurance Code Chapter 542 – Prompt Payment of Claims Act (PPCA): Requires insurers to acknowledge, investigate, and pay or deny covered claims within strict timeframes. Failure can trigger penalty interest of 18% per year plus attorneys’ fees.

• Chapter 541 – Unfair Methods of Competition & Unfair or Deceptive Acts or Practices: Allows homeowners to sue for treble damages if the carrier acts in bad faith by misrepresenting coverage, failing to settle promptly, or refusing to pay a claim without a reasonable basis.

• Texas Deceptive Trade Practices–Consumer Protection Act (DTPA): Provides an additional avenue for damages when insurers engage in false, misleading, or deceptive practices related to claim handling.

• Statute of Limitations: Most contractual suits against insurers must be filed within two years from the date the insurer breaches the policy (though some policies shorten this to one year). Always verify your policy’s “Suit Against Us” clause.

Prompt-Payment Deadlines for Mold Claims

• 15 calendar days: Insurer must acknowledge the claim and request any additional information.

• 15 business days after receiving requested info: Insurer must accept or deny the claim in writing (extendable to 45 days with written explanation).

• 5 business days after acceptance: Payment must be issued.

Failure to hit any of these deadlines can trigger PPCA penalty interest and attorneys’ fees, significantly increasing the insurer’s exposure and motivating quicker settlements.

Bad Faith and Extra-Contractual Damages

Under Arnold v. National County Mutual (Supreme Court of Texas, 1987) and its progeny, an insurer that lacks a reasonable basis to deny or delay a claim—and knew or should have known it had no such basis—can be liable for “bad faith.” Courts may award mental-anguish damages and exemplary (punitive) damages in addition to actual policy benefits.

Because mold spreads rapidly, delays can turn a minor water leak into a six-figure remediation job. Demonstrating how the insurer’s slow response worsened the loss is often pivotal in bad-faith litigation.

Common Property Insurance Disputes in Texas

1. Mold & Water Damage

Texas insurers frequently limit mold coverage through caps (e.g., $5,000) or endorsements requiring proof the mold resulted from a covered peril such as sudden pipe bursts. Disputes often center on:

• Causation: Insurers claim slow leaks or “maintenance issues” are excluded.

• Scope of Remediation: Adjusters undervalue replacement of porous materials (drywall, insulation) or refuse to pay for industrial HEPA filtration and clearance testing.

• Cap Application: Carriers improperly apply mold caps to related water damage or tear-out costs.

2. Wind & Hail Roof Claims

San Antonio’s spring storms unleash high winds and hailstones that bruise or puncture shingles. Typical disputes involve insurer engineers attributing damage to “wear and tear” to avoid full roof replacement.

3. Hurricane & Tropical Storm Losses

Although San Antonio sits 140 miles inland, storms like Hurricane Harvey (2017) dumped historic rainfall on Bexar County, causing widespread flooding and mold. Coverage often hinges on wind-driven rain vs. excluded surface water.

4. Fire and Smoke Damage

Even small kitchen fires can require extensive soot cleaning and HVAC duct replacement. Disagreements arise over cleaning methods and business interruption for rental units.

5. Disputes Over Repair Scope & Pricing

Insurers rely on estimating software (e.g., Xactimate) that may undervalue local labor rates. Homeowners should secure independent contractor bids to counter lowball estimates.

Texas Legal Protections & Regulations

Appraisal Clause

Most Texas policies include an appraisal provision letting either party demand a quasi-arbitration to resolve the amount of loss. Key points:

• Deadline: No statutory deadline, but courts enforce “reasonable time” after dispute arises. Demand appraisal promptly once you receive a payment you believe is too low.

• Process: Each side hires an appraiser; the two appraisers select an umpire. Agreement by any two sets the loss amount, binding absent fraud or procedural misconduct.

• Costs: You pay your appraiser; parties split umpire fees.

Recent Court Rulings Impacting Appraisal & Mold Claims

Barbara Technologies Corp. v. State Farm Lloyds (Tex. 2019) held that payment following appraisal does not immunize insurers from PPCA penalty interest. In mold contexts, this ruling lets homeowners pursue penalty interest even after the insurer writes a check post-appraisal.

Notice Requirements & “Hail Bill” Chapter 542A

Since 2017, Chapter 542A requires pre-suit notice 60 days before filing most property-damage lawsuits, with a detailed estimate and calculation of attorney’s fees. Although designed to curb increased litigation, many carriers use the statute to push for early settlement. Failure to provide proper notice can limit fee recovery, so involve counsel early.

Texas Department of Insurance Oversight

The Texas Department of Insurance (TDI) regulates insurer conduct and investigates consumer complaints. While TDI cannot order payment of disputed sums, its investigations can pressure carriers and generate records useful in later litigation.

Steps to Take After a Property Insurance Dispute

1. Mitigate Further Mold Growth

• Stop the Water Source: Shut off valves or arrange emergency plumbing repairs.

• Document Mitigation: Keep invoices for fans, dehumidifiers, and tarps. Texas law obligates homeowners to prevent further damage.

2. Document Everything

• Photograph moisture stains, visible mold colonies, and damage progression.

• Maintain a claim diary: dates, names, and summaries of every call or email with adjusters.

• Request all communications in writing.

3. Obtain Independent Estimates

Securing at least two licensed mold remediation bids provides leverage when the carrier’s estimate seems low. Make sure bids comply with the Texas Mold Assessment and Remediation Rules (25 T.A.C. §295.301).

4. Invoke Appraisal or Demand Re-Inspection

If the insurer’s estimate is unreasonably low, send a written demand for appraisal under the policy or request a re-inspection with your contractor present.

5. File a Complaint with TDI

Complete TDI Form CP-INS by mail or online. Attach photos, estimates, and adjuster correspondence. TDI must acknowledge within 15 days and issue findings within 90 days. While non-binding, a favorable finding strengthens any future lawsuit.

6. Preserve Deadlines

Calendar the two-year contractual limitations period and the 60-day Chapter 542A pre-suit notice requirement. Missing either can destroy claims even when the insurer is clearly at fault.

When to Seek Legal Help in Texas

Red Flags Requiring an Attorney

• Claim exceeds mold sublimit but insurer refuses to consider water-damage coverage.

• Carrier delays payment past PPCA deadlines without valid reason.

• Lowball settlements that fail to meet licensed remediator estimates.

• Denial citing “long-term seepage” despite sudden plumbing rupture.

How Louis Law Group Protects San Antonio Homeowners

Our Texas-licensed attorneys scrutinize policy language, engage industrial hygienists, and pursue bad-faith litigation when necessary. We operate on contingency, front expert costs, and pursue PPCA interest to maximize recovery. Negotiations often resolve before suit, but we are prepared to file in Bexar County District Court if the insurer refuses to deal fairly.

Local Resources & Next Steps

Texas Department of Insurance Consumer Help Line: 800-252-3439 Bexar County Clerk: Access property deeds and litigation filings. State Bar of Texas Lawyer Referral & Information Service

• Texas A&M AgriLife Extension: Local mold remediation and indoor air quality resources.

Legal Disclaimer: This guide provides general information for Texas policyholders and does not create an attorney-client relationship. Laws change frequently; consult a qualified lawyer about your specific situation.

Need immediate help? 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.