When Does Homeowners’ Insurance Cover Mold?
Are you curious if your homeowner’s insurance policy will cover mold? While every homeowner hopes never to face a mold infestation, you might find yourself in an unfortunate situation. Mold is a hot-button topic in the insurance industry and has been for years. In the late 1990s, the insurance industry changed the wording of home insurance policies to limit mold coverage as they were paying out hundreds of thousands of dollars in claims. Covering mold is a risky and expensive task, which is why many policies now offer limited if any, coverage.
Currently, most states permit home insurance companies to exclude mold from their coverage policies, and often your homeowner’s insurance policy will only cover mold on a very specific case-by-case basis. Mold coverage is a complicated category due to several factors. One of which is the challenge in tracking down the root cause (a key component to filing a successful claim with your insurance).
Below we discuss answers to your questions and offer expert advice on how to go about tackling a mold insurance policy claim with your homeowner’s insurance company.
In a hurry? Here are some key takeaways!
- Insurance policies cover mold damage on a case-by-case basis, meaning mold coverage isn’t a guarantee with your homeowner’s insurance policy.
- Insurance policies cover mold if it is accidental and sudden or related to a covered peril.
- Any mold caused by a peril not covered on your policy or due to homeowner neglect is not covered.
- Flood specific policies cover mold damage due to flooding
- Have proof of the cause of mold growth and submit this evidence alongside your insurance claim.
When Does My Policy Cover Mold?
Suppose you purchased a home in an area where mold is prevalent. In that case, it is important to research the types of mold covered by your home insurance policy before signing or renewing your policy.
The mold coverage your home insurance policy offers is dependent on your covered perils. Therefore, it is important to review your policy, but the following are common mold causations covered on most policies:
- A falling object
- An appliance or equipment failure
- Mold growth due to excess moisture from putting out a fire
- Snow, sleet, and ice add extra weight to your home
- Water and steam overflow or discharge within your plumbing system, heating, and air conditioning unit, automatic fire protection sprinkler system, or household appliance
Additionally, your insurance policy will cover mold damage when the damage is due to a sudden and accidental issue. This means that the mold’s cause needed to happen suddenly and not due to any fault of your own.
Here are some examples of instances where your policy will cover mold:
- Your air conditioning unit breaks and releases water that causes black mold to grow on the wall.
- Your home catches on fire, and mold grows due to stagnant water after the firefighters extinguish the flames.
- Your dishwasher doesn’t drain and floods your kitchen, resulting in mold growing along the base of your cabinets.
When Doesn’t My Policy Cover Mold?
Mold Resulting From Negligence
Typically, your homeowners’ insurance policy does not cover mold-related damage due to a homeowner’s negligence. For example, suppose you could have prevented mold by fixing your leaking sink pipe or plugging in a dehumidifier. In that case, chances are your homeowner’s insurance will not cover the cost of mold removal and remediation.
Flooding and Other Natural Disasters
Your homeowner’s insurance policy is not a catch-all safety net. Specific perils and the mold caused by them are not covered if they are not listed under your property policy.
Let’s say mold grew due to water damage from flooding. A standard homeowner’s policy will not cover mold damage due to flooding. This is because most homeowners’ policies do not cover flooding. It would benefit you to opt for special flood insurance for that.
Mold growth due to other acts of nature, such as an ice storm or a hurricane, is potentially covered under your homeowner’s policy. For example, suppose your roof gets torn off in a hurricane, leaving your home unprotected from water resulting in water damage and mold growth. In that case, your insurance might cover mold remediation along with the other damages caused to your home.
But… I Just Moved In?
Insurers will not cover any mold growth that occurred from damage before the start of your policy or before you purchase the home. Therefore, it is very important to complete a thorough home inspection before signing the dotted line.
Some examples of when your policy wouldn’t cover mold:
- A neglected sink has leaked for years and resulted in mold growth.
- You did not use a dehumidifier in your basement even though you live in a humid climate where mold is prevalent.
- You opted not to have flood coverage on your homeowner’s insurance policy, and due to unexpected flooding, mold has grown in your home.
How Do I Submit an Insurance Claim for Mold?
If you have discovered mold in your home, you’ll want to file a claim with your insurance. Due to the challenges of having mold growth covered, you will want to take an abundance of pictures to show your insurance company and submit alongside your claim. It can also help to have a professional look at the damage to determine the official cause.
After documenting the damage and submitting your claim, please wait until your insurance company tells you it’s safe to begin the restoration process. We recommend having a professional help you with this one! A big reason why is because your insurance company will likely only cover the initial damage. This means that you’ll be responsible for all damage that occurs after – AKA if the mold spreads. A reputable mold remediation company can save you money in the long run.
Mold claims are often denied if the insurance company deems the cause of mold is an uncovered peril or due to homeowner negligence. This is why it can save you money and heartache to have a professional come and identify and document the source of the mold. Filing your initial claim with direct proof of the cause will prevent misunderstandings and ultimately denials.
Here are several tips to prevent a denial:
- Be proactive – Install dehumidifiers in areas of your home where dampness regularly occurs.
- Stay vigilant – Check plumbing pipes and fittings for leaks regularly, inspect your roof, windows, and doors to note any cracks where water could leak in, and check appliances and water heaters for leaks.
- Ventilate! Ensure areas of higher moisture are adequately ventilated, such as your bathrooms, laundry rooms, kitchens.
- Prepare – Clean your gutters to prevent ice from building up in the winter, which can lead to leaks, and insulate your interior and exterior pipes before it freezes to avoid breaks or leaks.
Finally, review your policy carefully to ensure you know what is and is not covered, and prepare to advocate for yourself. Home insurance companies can be quick to deny a mold claim. However, if you believe your policy covers your claim, gather your proof and stand your ground.
How Much Will Insurance Pay?
Mold damage is expensive and, on average, costs between $15,000 and $30,000 to remediate. Sadly, insurance companies aren’t huge fans of losing money, so they have several policies in place to reduce their cost. One of them is reducing the amount they will pay for mold damage — even if a covered peril causes it. Typically, insurance policies state a maximum limit of between $1,000 and $10,000 for mold remediation.
Some policies allow you to purchase mold coverage above that amount, but additional coverage can be costly if you live in a mold-prone state like Flordia.
The above tips are simply guidelines to help you navigate; while these tips can help, we highly recommend discussing your options with your insurance agent and reviewing your policy before making any decisions. If you need a professional, reputable mold remediation company, please contact us and learn how we can help you!