San Antonio Guide to Texas Property Insurance Law & Mold Claims

15 min read

Introduction: Why Every San Antonio Homeowner Must Know Texas Property Insurance Law

San Antonio’s subtropical climate delivers scorching summers, sudden cloudbursts, and the occasional hailstorm drifting up the I-35 corridor. Add in older housing stock on limestone foundations and you have the perfect recipe for water intrusions and hidden mold damage. When a pipe bursts behind a wall or rain seeps through a compromised roof, homeowners depend on their property insurer to cover repairs. Yet many San Antonians encounter delays, lowball offers, or outright denials—especially with complex mold claims, which carriers often label as “maintenance” rather than covered water damage.

This guide—focused on Texas property insurance law in San Antonio—explains your legal rights, the timelines insurers must follow, and concrete steps to protect your claim. Whether you are battling a lingering mold dispute or a recent hail loss, the information below is geared to help policyholders fight back and maximize recovery.

Understanding Texas Property Insurance Law

Key Sections of the Texas Insurance Code

• Chapter 542 – Prompt Payment of Claims Act: Requires insurers to acknowledge, investigate, and pay or deny claims within strict statutory deadlines. Failure may trigger 18% annual interest and attorney’s fees.

• Chapter 541 – Unfair Methods of Competition and Unfair or Deceptive Acts: Provides a cause of action for bad-faith conduct, including misrepresenting policy provisions or failing to attempt a prompt, fair settlement.

• Chapter 554 – Mold Coverage Notices: Texas mandates clear policy language on mold coverage, exclusions, and remediation limits, a critical provision for San Antonio homeowners facing spore contamination.

Prompt Payment Timelines

Under Chapter 542, your carrier must:

• Acknowledge and begin investigation within 15 business days after receiving written notice of your claim.

• Request all necessary items within the same 15-day window.

• Accept or reject the claim within 15 business days after receiving all requested documents (extended to 45 days if the insurer provides a written explanation).

• Pay accepted claims within 5 business days after notifying you of approval.

Missing any deadline can expose the insurer to statutory interest and attorney’s fees—powerful leverage when negotiating fair payment.

Bad Faith Protections

Texas recognizes a common-law duty of good faith and fair dealing. If an insurer knowingly undervalues covered mold remediation costs or drags out an appraisal, you may sue for extra-contractual damages. Landmark cases such as Arnold v. National County Mutual Fire Ins. Co. and USAA Texas Lloyds Co. v. Menchaca reinforce the principle that homeowners may recover for bad-faith handling, separate from policy benefits.

Common Property Insurance Disputes in Texas

1. Mold Damage

Mold claims hinge on proving a covered water event. For example, a sudden pipe burst is typically covered, but long-term humidity or seepage might be excluded. Policies often cap mold remediation at $5,000–$10,000 unless you purchased an endorsement. Insurers frequently argue the contamination pre-dated the water loss or falls under the “maintenance” exclusion.

2. Wind and Hail Damage

From spring squall lines to late-summer storms, Bexar County experiences more than its share of hail. Disputes usually involve roof repair scope—complete replacement vs. spot patching—or cosmetic vs. functional damage.

3. Water Damage (Non-Mold)

Slab leaks and appliance failures can flood homes. Carriers sometimes allege “gradual seepage,” an exclusion, to deny coverage. Prompt professional moisture mapping is critical.

4. Hurricane and Tropical Storm Claims

Although San Antonio sits inland, remnants of Gulf hurricanes still unleash torrents. Disagreements often arise over wind vs. flood causation, differing deductibles, and anti-concurrent causation clauses.

5. Fire and Smoke Losses

Total losses involve code-upgrade (ordinance or law) expenses and additional living expense (ALE) disputes. Texas law requires clear policy language on ALE limits.

Texas Legal Protections & Regulations

Statute of Limitations

• Contract claims (breach of policy): four years from the date the claim is denied.

• Bad faith / Chapter 541 actions: two years from the date the unfair practice occurred or should have been discovered.

• Prompt Payment (Chapter 542): two years.

Appraisal Clause Procedures

Most Texas homeowner policies include an appraisal clause allowing either party to demand a neutral valuation of the loss. Key points:

• You must invoke appraisal in writing—certified mail is preferred.

• Each side picks an appraiser, who then selects an umpire.

• The written award is binding on value, but not on coverage. You may still litigate denied portions.

• Texas courts (see In re Universal Underwriters of Texas Ins. Co.) hold that an insurer who pays the appraisal award within five business days generally avoids prompt-payment penalties, but not necessarily bad faith liability.

Penalty Interest & Attorney’s Fees

Chapter 542’s 18% annual interest accrues in addition to prejudgment interest. When combined with attorney’s fees, this can significantly increase a carrier’s exposure, making early settlement more attractive.

Recent Court Rulings Impacting San Antonio Homeowners

Barbara Technologies Corp. v. State Farm Lloyds (Tex. 2019): Appraisal payment does not bar prompt-payment claims. Alma Vista Holdings, LLC v. State Auto Prop. & Cas. Ins. Co. (W.D. Tex. 2021): Court allowed bad-faith allegations to proceed despite insurer’s post-suit payment.

Step-by-Step Actions After a Property Insurance Dispute

1. Document Everything Immediately

• Take date-stamped photos/video of all damage, including moisture readings if mold is suspected.

• Keep a written log of every call, email, and adjuster visit.

2. Mitigate Further Damage

Texas policies impose a duty to prevent additional loss. Hire an IICRC-certified remediation company for water extraction and mold containment. Save invoices—they are reimbursable if the loss is covered.

3. Obtain Independent Estimates

Secure at least two contractor bids using Xactimate or similar pricing software. Insurers often rely on proprietary pricing that undervalues labor rates in metro San Antonio.

4. Invoke the Appraisal Clause When Appropriate

If the dispute is purely over dollar amount, appraisal can be quicker than litigation. Send a certified letter to the carrier referencing the policy’s appraisal section. Choose an appraiser familiar with Texas wind, hail, and mold scoping.

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

TDI investigates unfair claim practices. Include claim numbers, adjuster names, and a concise timeline. You may file online or by mail. Visit TDI’s complaint portal.

6. Consider a Bad-Faith Demand Letter

Under Chapter 541, you must give 60 days’ pre-suit notice. Detail each statutory violation and demand specific damages, including attorney’s fees.

When to Seek Legal Help in Texas

You should consult a San Antonio insurance attorney if:

• Your claim is denied for “maintenance” or “wear and tear” despite evidence of a sudden event.

• The insurer refuses to cover mold remediation above the $5,000 cap when the policy endorsement appears to provide higher limits.

• Delays exceed Chapter 542 deadlines and you are accruing credit-card debt for repairs.

• The adjuster’s estimate is tens of thousands below independent bids.

• You receive a subrogation notice from your mortgage lender threatening foreclosure due to unrepaired damage.

Louis Law Group’s Texas-licensed attorneys can evaluate your claim, demand appraisal or litigation, and advance costs so you pay nothing unless we recover for you.

Local Resources & Next Steps

• Texas Department of Insurance Consumer Help Line: 1-800-252-3439

Bexar County District Courts: File lawsuits over $200 in dispute. Visit Bexar County District Clerk for forms.

• State Bar of Texas Lawyer Referral Service: 1-800-252-9690

San Antonio Legal Services Association (SALSA): Free legal aid for income-qualified homeowners. SALSA website Texas Insurance Code: Read the full statute at Texas Legislature Online

Disclaimer

This guide provides general information, not legal advice. Laws change and apply differently to individual facts. Consult a qualified attorney for guidance specific to your situation. Louis Law Group attorneys are licensed in Texas. Past results do not guarantee future outcomes.

Ready to Protect Your Rights?

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 comprehensive policy review today.