Mold has been a very contentious topic in the home insurance industry for decades. Between the late 1990s and early 2000s, the insurance industry altered the wording of home insurance policies to limit mold coverage after a spike in mold damage claims in conjunction with homeowners insurance water damage claims.
Texas insurers, in particular, were getting multiple claims for the same properties. One property’s paid mold claims could be higher than the homeowner’s insurance limit due to multiple claims.
“Back when mold-related damage was covered, insurance companies were paying out hundreds of thousands of dollars in claims. Insurers quickly realized that covering mold was too risky of an endeavor; therefore, many policies now offer limited coverage, if any,” says Steve Severaid, senior vice president and treasurer with The Greenspan Co./Adjusters International.
Now most states allow home insurance companies to exclude mold from coverage, except when the mold was the result of a problem covered by the policy.
Because your homeowners insurance policy may provide only limited mold-related coverage, there are a few things to consider in order to avoid the staggering cost of trying to get rid of mold.
When is Mold Covered by Homeowners Insurance?
Mold is a fungus that can be found almost everywhere in and outside your home. But some forms of mold are considered hazardous, such as black mold, which can produce chemicals that cause severe illness.
Usually mold, mildew, fungus or spores will be covered by home insurance if they were the result of a specific problem that was covered by your policy. An example would be water damage from a burst pipe that then leads to mold.
“Overall, to make a successful mold claim you must demonstrate that the damage from the mold was sudden and accidental when you found it and you reported it promptly to your insurer. This is the best way to ensure your insurance provider will cover the damages, “ says Severaid.
Still, mold coverage might be limited to $10,000. In some cases you can add mold coverage with higher limits in exchange for a premium increase.
Most homeowners insurance policies have a long list of exclusions of damage caused by mold. Some policies may have exceptions to the exclusions and will provide very minimal coverage for mold contamination. Usually homeowners insurance won’t cover damages from mold if it was caused by:
- Typical wear and tear
- Long-term leaks that weren’t repaired
- Moisture or water from construction
- Bad repairs
So if you were unaware of some sitting water in your basement, and mold grew over time and traveled up the walls and into your floorboards, this won’t be covered by your policy.
Here’s a guide to mold and moisture in homes from the EPA.
Finding Coverage for Mold
If you live in an area prone to mildew or high humidity, you may need more routine maintenance in order to fend off moisture and mold. Even if you meticulously clean your property, mold could go unnoticed and cause extensive damage before you spot it. There may be some coverage options.
Policies that include mold remediation. Some homeowners insurance policies, such as policies for high-value homes, will give you more coverage automatically.
For example, Chubb can provide coverage for “mold remediation expenses.” This includes testing indoor air quality and surfaces, developing a mold remediation plan, and implementing the plan, such as removing, containing and disposing of the mold.
Mold insurance riders. Some insurers offer a mold-damage rider or endorsement that you can add to your policy. This rider removes a policy’s exclusion for mold.
Keep in mind, mold damage riders might not be offered in your state or by your insurer.
How to Make a Successful Mold Insurance Claim
If you think you suspect mold in your home, here are a few tips for successfully navigating your claim.
Be ready to advocate for yourself. A home insurance company might quickly deny a mold claim. So if you believe you’re entitled to coverage, be ready to stand your ground. Don’t try to guess at the cause of the mold on your own, unless it’s obvious, such as a burst pipe. Ask for an investigation into the cause.
Make a claim. Call your insurance provider immediately to make a claim. Keep a log of detailed notes of every conversation with your insurance provider and who you spoke with.
Review your policy. Review your homeowners insurance policy carefully to understand your coverage.
Protect your property from further damage. Don’t start actual repairs before an insurance adjuster has evaluated your damage, but do take actions to prevent further damage. For example, if you have roof damage, you may need to cover holes.
Provide supporting materials for your claim. Photograph, videotape and take an inventory of all of your damaged property. You’ll want to document your loss as thoroughly as possible to support your claim.