In de Laurentis v. United Servs. Auto. Ass'n, 162 S.W.3d 714 (Tex. App.--Houston 14th Dist. 2005, pet. denied), the Court considered whether mold damage to a house was covered under a homeowner's policy. 162 S.W.3d at 721.
The insurance company argued that mold was not a covered peril under the "named-perils policy."
The Court agreed with the homeowner that the mold damage was caused by a water leak, which was a covered peril under the policy. Id. at 724-25.
The Court explained that "a physical loss includes the natural consequences of the named peril" and consequently the mold "damage could be a physical loss covered under the . . . policy." Id. at 723, 725.