Does Homeowner's Insurance Cover Mold?
Updated: Nov 18, 2022
You’ve found that your property, whether it be home or business, has a growth of mold. It will typically develop in warm, wet areas and reproduces through tiny spores that get shot out throughout your home but are invisible to the naked eye. If you’ve found that your property has had a water leak or poor ventilation that has led to a build-up of unexplained condensation - you may be liable to mold growth.
It is important that any mold growth is taken care of as quickly and efficiently as possible. A build-up of mold can and will affect the structural integrity of materials that it has grown upon. If there has been significant water intrusion that has led to the possibility of mold - those first 48 hours are crucial in stopping and containing the spread of the mold.
When is Mold Covered?
Homeowners' mold insurance claims often carry vague phrasing concerning mold coverage. It can be hard to conclude whether any mold damage you find will be covered by your insurance policy. Typically, policies bar coverage for mold damage, except when the mold is the result of a reported claim, for example, water damage.
Mold removal is only included in your insurance coverage when the cause of the mold is a hazard that is already covered in your homeowner's policy. Standard homeowners insurance policies defend you from water damage produced by sudden and accidental incidents
AC water event from a broken PVC pipe as evidenced by a new pipe or joint installed by a plumber or homeowner
Kitchen cabinets that are water damaged, swollen, delaminating, and moldy due to any kind of leak inside the wall that could not be detected and would not be expected to be handled by normal maintenance.
Window leaks as a result of wind-driven rain from a hurricane are covered but the higher hurricane deductible applies
Roof leaks from any age roof as a result of a hurricane
If there is mold present, there are some important steps to take:
Identify the area present
Identify the amount of mold or how large the contaminated area is.
Take photographs of everything
Notify the insurance company from loss site by phone that there is mold
Call a licensed mold assessor if your insurance company has told you to
Get a licensed mold remediation company and prepare an estimated cost
Keep the insurance company advised on everything that is going on.
So, When Mold is Not Covered?
When it comes to mold damage applying for insurance to cover the cost can be a little trickier than expected. This is due to the different definitions of damage that insurance companies use in your contractual agreement with them. If you have water damage and it’s covered in your policy - insurance companies will happily pay for it. However, if you’ve neglected additional coverage (which would include mold) you may find your insurance claim being denied.
Examples not covered:
Areas with high moisture content that result in mold, but where there is no plumbing or roof leak
AC drain pan drip overflow that is defined as seepage or slow leak and not a result of a broken pipe
Kitchen cabinets that are water damaged or moldy due to a slow leak
Roof leaks due to poor maintenance
In short, the responsibility is on the property owner. If the insurance company find out that you haven’t been looking after your property, or that you’ve taken too long to report a problem, you won’t be entitled to a claim.
Sometimes, it’s not quite as it seems
You may be thinking, “Of course, I’m covered. If the water damage that I’m rightly covered for causes growth of mold, it counts as a covered loss!” Unfortunately, that can be a very wishful statement. Of course, it is universally known that it should be the case - however, because of insurance policy provisions and exclusions, you may not have any coverage for mold, fungi, bacteria or wet/dry rot.
Usually, when there is damage caused through no fault of your own it will be covered, which typically includes any ancillary damage. For example, a fire burning up kitchen cabinets is the direct damage - your living room taking damage due to the smoke the fire gave off, is ancillary damage that would be covered. Again, unfortunately, the same doesn’t go for mold. This is because of the above-mentioned definition that insurance companies have used.
Why have they changed the definition?
Simply, mold is a lot more risk than anything else like smoke damage. There are lots of health implications that can be resulted in a growth of mold, and can be very expensive for insurance companies. Therefore, they tend to get you to take out additional insurance
What must you do before making a claim?
The first thing you must do, and relatively simple but often people forget, is to actually read your insurance policy.
If you’re not sure of anything, call the agent and ask for it to be explained.
Ask if you have mold coverage and if you do what are the limits
Confirm whatever the agent has informed you of with your insurance company directly.
A bit like with car insurance, if you keep making claims on your home insurance, they could be likely to cancel your contract with them. When making a claim ensure that it is for the correct and legal reasons. Make sure it is essential to make a claim on your insurance to keep away any unwanted politics.
To file a mold claim, contact your insurance company as soon as possible.
If you're uncertain if your policy covers mold damage, review your home insurance policy or ask your insurance company.
How to avoid things going wrong with your claim
It is essential to document the cause and extent of water invasion, and evident mold contamination. Seal off and save contaminated items. In a conflict with your insurer over whether any particular home component, item, furnishing, or belonging is contaminated, the item may be required to be examined by a remediation consultant–the insurer’s and maybe your own. Don’t throw these items away until any such matters are concluded in writing.
For best practice, when you have professional mold inspectors and testers come to your property, ask them for all the documentation that they have used. Including the initial mold inspection plan and post-remediation report.
Do not exaggerate, guess, or speculate the value of your losses over any item or property.
In most states, a substantial or minor misrepresentation, concealment, or omission–even an accidental one–made in conjunction with the claim (for example, insisting that an item was damaged when it actually was not), or considerably overstating the cost of a damaged item–may supply your insurer a legitimate excuse to deny the claim and even revoke the policy.
This is perhaps a common tactic employed by adjusters and claim representatives who are predisposed to reject or lowball a claim. For the purpose of ferreting out even minor inconsistencies between your first recorded statement and succeeding recorded statements, and arguing that these discrepancies create material misstatements sufficient enough to renounce your claim. Don’t give them the opportunity by doing this.
Make it transparent to your insurer when your memory may not be wholly reliable, and that you are estimating a price roughly, it’s okay to note down "To Be Determined" for the price of items you're not sure about. If you don’t hold receipts to prove what an item cost, gather catalogs, statements from retail clerks, bank statements, credit card statements or allegations from family members or friends. If all else fails, get a formal appraisal. Keep this as a last resort, because your insurer will customarily decline to compensate you for the costs of hiring your own appraiser and consultants.
Avoid any further damage to your home
We’re not saying that you have to hire a contractor to come and start work straight away, especially if you can’t afford it. Make sure the insurance assessor or ‘adjustor’ has come to inspect the value of the damage first before any repairs take place. However, do take some actions in order to prevent any further damage from occurring. If you would like to, you may hire a public adjustor (a paid consumer advocate who recovers funds for damages for a policyholder from their own insurance company). Essentially, they will act for you and at time can recover amounts significantly higher than what an insurance company would initially be willing to give out.
Some steps to ensure further damage is stopped:
Turn off any water leakage that occurs from broken appliances or pipes.
Take any required emergency measures to preserve the building and personal property from any additional harm.
Do not discard anything away until you have the approval of the insurance company, and you have documented its status and condition.
It is encouraged that you hang on to contaminated items until they can be mold inspected and tested by a licensed mold inspector or company for mold content. If in doubt, cover the items in plastic or foil and seal them away in a plastic bag for storing.
If there is roof deterioration over your house, you may need to hire a constructor to wrap it with a plastic tarp or tent your home to shield you against bad weather.
BNF Consulting, Inc. is a licensed mold inspection company that abides by New York State & US EPA regulations for mold inspection and testing. Does your home or business have a mold problem? Our company can provide a reliable mold inspection service to determine potential risks. Call us today at 914-297-8335 for a free phone consultation!
Justin H. Joe, PhD, CIH, CSP, CPE, is a Certified Industrial Hygienist and
a principal consultant of BNF Consulting, Inc. Dr. Joe graduated from the University of Illinois at Urbana-Champaign with PhD and MS degrees in nuclear engineering. Dr. Joe has provided industrial hygiene consulting as a core function with his diverse background of experience and education.
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