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When Your Insurance Will (and Won’t) Cover Mold Damage

Homeowners insurance policies often include vague wording regarding mold coverage, and it can be difficult to determine whether any mold damage you encounter will be covered. Typically, policies exclude coverage for mold damage, except when the mold is the result of a covered claim, such as water damage.

When Does Homeowners Insurance Cover Mold Removal?

Mold removal is only covered when the source of the mold is a peril already covered in your homeowners policy, such as water damage. Standard homeowners insurance policies protect you from water damage caused by sudden and accidental incidents, such as a burst pipe or an overflow resulting from a malfunctioning AC unit. If the resulting moisture from such an issue causes mold to develop, you'd be able to file a claim for mold removal, as well as for the repair of any property permanently damaged by the mold, under your water damage coverage.

Example Scenarios Where Mold Remediation Is Covered

  • Your water heater ruptures, releasing water that causes black mold to grow on the in surrounding walls.
  • You experience a home fire, and mold develops after firefighters use water to extinguish the flames.
  • Your dishwasher malfunctions and floods your kitchen, resulting in mold growing along the base of your cabinetry.

Your Policy May Not Cover The Whole Thing

Mold damage can cost between $15,000 and $30,000 to remediate, so insurance companies have enacted several measures to reduce their risk. One of them is reducing the amount they will pay for mold damage—even if it is caused by a covered peril. Typically, insurance policies will state a maximum limit of between $1,000 and $10,000 for mold remediation. If you want to purchase broader mold coverage above that amount, it can usually be added as an optional rider. However, if you live in a mold-prone state, such as Florida, this coverage can be expensive to obtain.

When Does Homeowners Insurance Exclude Coverage for Mold?

Mold caused by your own neglect and lack of maintenance will likely be denied by your home insurance company. For example, you may notice a minor leak but fail to do anything about it since the amount of water leaking seems negligible. Over time, however, that leak could cause mold to spread throughout the surrounding area. If you tried to file a claim for the leak—and the resulting mold—weeks or even days after the leak became apparent, your insurance provider would likely claim that you failed to act immediately and therefore deny coverage. Also, no mold damage resulting from a regional flood will be covered, since flooding is a peril excluded from your homeowner's insurance policy. However, if you purchased a separate flood insurance policy, that coverage would extend to any mold damage caused by a flood.

Example Scenarios Where Mold Remediation Is Not Covered

  • Your bathtub has leaked for years, resulting in a mold infestation.
  • You live in a humid climate and failed to use a dehumidifier in your basement, and black mold grew as a result.
  • A storm causes flooding, and subsequently mold growth, in your home.

How to File a Homeowners Claim When You Have Mold

In some cases, your mold claim will coincide with the claim you file for a causal incident. For example, if a pipe burst and flooded your house, your insurance company may send a mold remediation team to properly dry your home in order to prevent mold from ever growing in the first place. This is ideal, since it will minimize damage and prevent you from paying a deductible for two separate claims—one for the flooding repairs, the other for the future mold removal. In these situations, ask your insurance agent if the necessary mold remediation is totally covered by your claim. Also, keep meticulous records of all damaged areas and repairs in order to support potential future claims. In other cases, you might discover mold some time after water damage has occured. In these situations, you'll need to prove that the mold is resulting from the covered peril and not a new leak or lack of maintenance. If this is true, follow these steps to file a claim:

  • Contact your insurance agent as soon as possible. They'll need to send an adjuster to assess the total cost of the damage and evaluate whether it is, indeed, related to a covered claim.
  • Open windows or run a dehumidifier or fan in order to dry out the room and prevent further mold growth. However, don't try to clean or remove anything. The insurance adjuster needs to review all damaged property.
  • Photograph all damaged areas and property, and gather any relevant photos you have from the prior water damage to supplement your claim.
  • Review your policy or consult your agent to determine your policy's mold coverage limits.

As best as possible, try to prove that this mold is related to your initial water damage claim. That way, you won't get stuck paying two separate deductibles. However, it's in your insurance company's best interest to view the damage as a separate claim. So you shouldn't be surprised if you encounter some resistance when trying to reopen a former claim.

Consider Alternative Homeowners Insurance Companies

Ask your homeowners insurance company whether it provides coverage for mold. Some insurance companies, like State Farm, have dropped coverage for mold altogether, even if it's a result of storm damage. However, there are still some large national insurance companies that provide coverage for mold. For instance, Allstate provides mold coverage, but it imposes a $5,000 coverage limit on claims. If mold is a big concern for you, consider switching insurance providers to one that offers coverage. Not only will you obtain some coverage for mold; you could potentially lower your home insurance rates by switching insurers.

How To Prevent Mold Growth

The cheapest way to deal with mold is by preventing it from growing in the first place. This is especially important for homeowners in mold-prone states such as Florida or Louisiana. You can achieve this by regularly cleaning, ventilating and dehumidifying areas prime for mold growth. Follow these tips to eliminate unnecessary moisture and minimize the risk of mold growing in your house:

  • Keep the humidity in your home between 30% and 60% with air conditioners and/or dehumidifiers
  • Install exhaust fans in kitchens and bathrooms
  • Don't install carpets in damp areas such as basements or bathrooms
  • Don't allow water to accumulate under house plants
  • Bleach your bathroom frequently
  • Regularly clean out your gutters
  • Periodically check crawl spaces, laundry rooms, and cabinetry beneath sinks for mold dampness
  • Inspect and replace hoses to appliances like dishwashers and refrigerators every five years

Being mindful of this list could help you save thousands of dollars over the course of your homeownership. However, if you do suffer a home flood, there are also several measures you can take to make sure mold doesn't grow before you can get a mold prevention team into the affected area.

  • Remove any standing water as soon as you've photographed the damage.
  • Move any rugs or affected furniture outside to dry.
  • Open windows and run a dehumidifier to remove moisture from the room.
  • Disinfect the area with bleach

How to Spot Mold in Your Home

Another key way to prevent mold growth is to identify it before it has the chance to spread. The larger the infestation, the more costly it will be to remediate. Mold can hide behind your walls, under your carpets, and behind your fridge; you need to be able to use your senses in order to detect growing mold in your home.

Smelling Mold

Mold has a distinct musty scent. Some compare it to the smell of rotting leaves in late autumn. The smell will be strongest in rooms where the mold is growing. However, if the smell becomes apparent when you turn on your home AC or heating unit, then the mold is likely in that system. If you smell the mold but can't see it, it is may be under carpet, an appliance or behind a wall, so you may need to call in a mold inspection team to locate it.

Seeing Mold

Mold is not always obvious, and can often hide in plain sight. For example, mold can grow in between the grout of your bathroom tiles without you even noticing. If you see or feel a velvety or furry texture, then it is likely mold. If the pattern appears uniform, it could be a mold colony. To quickly determine if an area does contain mold, ask yourself it makes sense for mold to be growing in that area. If the area is often humid (a bathroom), or poorly ventilated and unlit (a basement), then it is likely that mold is growing there.

Getting Sick From Mold

Another way to determine is there is mold in your home is if you are displaying physical symptoms as a response to the infestation. The following are common symptoms of mold exposure:

  • Asthma
  • Sore eyes
  • Itchy skin
  • Runny or blocked nose
  • Sneezing
  • Coughing
  • Sore throat

As you can tell, all of the above symptoms are related to a multitude of illnesses—especially allergies and the common cold. You will be able to distinguish between a common illness and mold, however, if you notice your symptoms are worse on evenings and weekends when you spend more time at home. Also, if others in your home display similar symptoms over a long stretch of time, you may have a mold problem.

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