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Mold Damage Insurance Coverage

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In recent years, horror stories about “toxic mold” growth in homes, businesses and schools have become a common theme in the news. These headlines have all got us wondering: just how afraid of mold, fungi and bacteria should we actually be?

Mold spores can certainly be toxic, but scenarios in which growths are large enough to pose poisoning risks to humans are rare. The more common problem with out of control mold growth is property damage. What’s worse is that most insurance policies don’t cover mold damage, and typically insurers deny these kinds of claims. So, what should you do when you find mold, fungus or bacteria in your home?

Types of Mold

For homeowners, the most important kinds of molds to know about are the four most common indoor molds: Cladosporium, Penicillium, Alternaria, and Aspergillus. Mold is happiest and grows best where conditions are warm and damp, so basements and showers are high-risk growth areas.

In terms of health, the good news is that most people are not affected by mold at all. But for those who are mold-sensitive, certain types of mold have the potential to cause some severe and mysterious symptoms. Routine exposure in the home or workplace can cause eye and skin irritation or breathing difficulties in people with pre-existing conditions like asthma or eczema. And for those with serious mold allergies, reactions can be much more severe. The Institute of Medicine and the World Health Organization has even found that exposure to mold causes respiratory problems in otherwise healthy children. For those with chronic lung illnesses, mold infections are a serious danger. Generally speaking, children and the elderly carry are at a higher risk.

Mold damage also harms the value of your home. Actual devaluation is subjective, but since severe cases of mold infestation can make it nearly impossible to insure a home, mold can render your home essentially unsellable. While the different kinds of spores might have slightly different growth patterns, all require moisture and warmth, and all should be eradicated when found.

Whether or not your home insurance will cover mold-related damages or mold eradication procedures depends on your policy and the factors contributing to the mold’s growth. Most mold growth is caused by water leakage or poor ventilation and unfortunately, many homeowner’s policies do not cover all kinds of water damage.

The bad news? Insurance companies are getting tired of mold too. Even if your insurance does cover some water damage many companies now explicitly limit or completely exclude coverage mold-related damage, regardless of the source. Be sure to read your homeowners policy every year, because providers are starting to trim their mold endorsements.

If you need mold coverage and don’t have it, there may be other options. Some policies, for instance, offer “buy-back” endorsements for mold claims which let you pay more money in exchange for some limited mold coverage. Other policies simply cap the amount of mold coverage or pay only for certain things such as cleanup or testing. So whether you’re buying a new home or switching policies, just be aware: it is far more difficult to find a mold damage inclusive policy for a home that has a history of mold. Call Union Restoration now for an Emergency.

At least 1,000 species of mold are common to the United States, according to the New York-based trade group the Insurance Information Institute. A breakout of splotchy mold on walls not only looks disgusting but also is a health risk that the Centers for Disease Control and Prevention says can bring about symptoms similar to allergies or even breathing difficulties.

Despite the threat, a standard homeowners insurance policy generally either limits coverage for mold damage or outright excludes it, says Loretta Worters, an Insurance Information Institute vice president.

Some insurers offer an endorsement to expand coverage limits for mold claims but only if you are willing to pay more for your insurance, she says.

The best cure for mold is to prevent it from growing in the first place. If the basement floods after a rainstorm or a pipe is leaking, eliminate the moisture promptly, Worters says.

“Even a spill on the carpet should be dried within 24 to 48 hours,” she says.

The costs of mold remediation will be covered if the damage was caused by a “named peril” specifically listed in your policy. The remediation costs will not be covered if the cause of the damage is excluded from your policy.

If a pipe in your home bursts and the water damage eventually leads to mold growth, then you should be covered because most policies include pipe bursts as a covered problem. On the other hand, standard policies do not cover mold growth caused by negligence or flooding.