Haris Ashley
Homeowners insurance policies often exclude mold damage, except when it stems from a covered claim. Mold damage coverage depends on the cause of the mold. If the mold is caused by a covered peril, such as a burst pipe, your insurance policy will likely cover the cost of mold removal and repairs. However, if the mold is a result of negligence, flooding, or lack of maintenance, standard policies typically won't provide coverage. To ensure coverage for mold-related issues, it is important to review your policy carefully and consider adding extra protection, such as flood insurance or water backup coverage.
| Characteristics | Values |
|---|---|
| Homeowners insurance coverage | Covers mold damage only if it's caused by a "covered peril", i.e., an event that the policy will pay for, such as accidental water damage. |
| Covered perils | Burst pipe, broken water heater, water damage caused by extinguishing a fire, heavy rain and wind damage, overflowing toilet, etc. |
| Exclusions | Flooding, leaks, sewer and sump pump backup, gradual issues, neglect or lack of maintenance, regional flood, etc. |
| Additional coverage | Sump pump and water backup coverage, flood insurance, hidden water damage coverage |
| Claims | Must be filed as soon as possible, with proof that the mold resulted from a covered peril. |
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What You'll Learn
Home insurance covers mould and mildew damage if caused by a covered peril
Home insurance policies often have ambiguous wording regarding mould coverage, and mould damage is typically excluded from standard policies. However, home insurance may cover mould and mildew damage if it is caused by a "covered peril", which is an event that your homeowners' insurance policy will pay for, such as accidental water damage. These events must be sudden and accidental. For example, if a washing machine suddenly starts leaking and causes mould to develop on the floor, a homeowners policy will likely pay to remediate the mould and possibly replace the floor if it is damaged beyond repair.
Home insurance policies generally do not cover mould damage resulting from flooding or a lack of home maintenance. Flooding, in this case, refers to scenarios that tend to affect multiple properties, such as overflowing rivers, tidal surges, or runoff from heavy rain. If you live in an area prone to flooding, it is advisable to purchase separate flood insurance. Even with flood insurance, your policy may not cover mould damage unless you cannot access your home after the flood.
Mould can grow anywhere in your home, including walls and ceilings, and it can cause allergic reactions. Therefore, it is critical to practice moisture control and regularly inspect your home for mould or dampness. If you discover mould, you should contact your insurance agent as soon as possible. They will send an adjuster to assess the damage and determine if it is covered under your policy. It is important to act quickly, as mould can grow in as little as two days, and insurance companies may deny coverage if they deem that you failed to act immediately to address the issue.
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Flood insurance and mould damage
Mould damage coverage varies depending on the flood insurance policy. Standard homeowners insurance policies do not cover mould damage from flooding, and separate flood insurance is required. The National Flood Insurance Program (NFIP), the country's largest flood insurance provider, only covers mould damage if you cannot access your home after a flood.
NFIP is managed by FEMA and delivered to the public by a network of more than 47 insurance companies and the NFIP Direct. It provides flood insurance to property owners, renters, and businesses, helping them recover faster when floodwaters recede.
Flood insurance is a separate policy that can cover buildings, the contents inside, or both. It is important to note that homes and businesses in high-risk flood areas with mortgages from government-backed lenders are required to have flood insurance.
When it comes to mould damage, it is essential to understand that standard homeowners insurance policies typically exclude coverage for mould damage unless it stems from a covered claim, such as water damage caused by a burst pipe or a malfunctioning AC unit. In such cases, you could file a claim under your water damage coverage for mould removal and repair.
To ensure coverage for mould damage caused by flooding, it is advisable to purchase separate flood insurance and review the specific terms of the policy.
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Sump pump failure and water backup coverage
Standard homeowners insurance policies typically do not cover sump pump failure and water backup incidents. However, sump pump failure and water backup coverage can be purchased as an optional add-on to your insurance policy. This type of coverage can help pay for water damage and the cost of restoring your basement to its original state. It can also cover the cost of replacing damaged belongings.
Water backup and sump pump failure coverage can protect you from costly repairs due to a clogged sewer line, a broken sump pump, or a backed-up drain. This coverage can also help pay for mould damage to your home caused by water or sewer backup. However, it's important to note that this coverage may not apply to gradual issues, such as water leaking through your home's foundation. It also typically does not cover flooding caused by natural disasters like overflowing rivers or heavy rain.
The cost of water backup and sump pump overflow coverage can range from $50 to $250 per year, with limits of coverage ranging from $5,000 to the full replacement cost of your home. It's important to review your insurance policy carefully to understand what is and isn't covered in the event of sump pump failure or water backup.
Additionally, it's worth noting that homeowners insurance policies typically only cover mould damage if it is caused by a "covered peril," such as accidental water damage from a burst pipe or a broken appliance. Mould damage caused by flooding or neglect, such as a continuous leak over time, is generally not covered by homeowners insurance.
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Preventing mould and mildew
To prevent mould and mildew, you should:
- Regularly clean, ventilate and dehumidify areas that are prone to mould growth, such as damp basements or crawl spaces.
- Keep the humidity in your home between 30% and 60% with air conditioners and/or dehumidifiers.
- Install exhaust fans in the kitchen and bathrooms to circulate the air and remove moisture.
- Avoid installing carpets in damp areas, such as the basement or bathrooms.
- Do not allow water to accumulate under houseplants.
- Regularly clean out your gutters.
- Periodically check crawl spaces, the laundry room, and cabinetry beneath sinks for mould or dampness.
- Inspect and replace hoses to appliances like dishwashers and refrigerators every five years.
- Fix plumbing leaks as soon as possible.
- Prevent rainwater from seeping into your home by ensuring the ground around the foundation of your house slopes away from the building.
- Avoid storing wet firewood, many plants, or vegetables like potatoes and squash, as these can increase the likelihood of mould.
- Avoid drying clothes on an indoor clothesline, as this can increase moisture.
- Use exhaust fans or open windows when cooking to reduce moisture.
- Take shorter showers and cover pots when cooking to minimise steam.
- Wipe down the shower with a clean towel or squeegee after its last daily use.
- Spread towels out after use so that they dry more quickly.
- Minimise containers left in the shower to improve air circulation.
If you suspect mould or mildew, it is important to act quickly. Clean the affected areas with soap, detergent, or disinfectant, and rinse with water. You can also use a mixture of lemon juice, salt, and water, or bleach to rinse affected areas. Be sure to wear protective equipment when working with mould, such as rubber gloves, eye goggles, and an N-95 respirator.
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Appealing a denied insurance claim
Homeowners insurance typically covers mold damage only if it is caused by a "covered peril", such as a burst pipe or accidental water damage. Mold damage caused by flooding or neglect is usually excluded from coverage.
If your mold claim has been denied, you can take the following steps to appeal the decision:
Understand the reasons for the denial
Review the denial letter and identify the specific reasons for the denial, such as the type of mold not being covered or missing deadlines. Understanding the denial reasons will help you craft a more targeted appeal.
Review your policy documents
Familiarize yourself with the sections of your insurance policy related to damage caused by "mold, mildew, and fungi". Look for any specific limitations or exclusions, such as the type of fungus covered or payout amounts. Understanding your coverage will help you align your appeal with the language and scope of your policy.
Know your rights and the insurer's obligations
In some states, like Florida, there are specific statutes and regulations that govern how insurers must handle mold claims. For example, insurers in Florida are required to offer mold coverage as an optional endorsement and adhere to certain timeframes for investigation and payment. Knowing your rights and the insurer's obligations can provide leverage for your appeal.
Engage independent professionals
Consider hiring independent mold assessors or public adjusters to provide unbiased evaluations and expert testimony. Their reports and statements can significantly strengthen your appeal by offering credible and detailed information about the scope and cost of the damages.
Craft a persuasive appeal letter
Write a clear, factual, and concise appeal letter presenting your argument. Address the specific reasons for the claim denial and provide any additional evidence or documentation to support your case. Follow any guidelines provided by the insurer regarding the appeal process, including deadlines and required forms.
Consult with professionals
If you encounter unreasonable requests from your insurer or need legal advice, consider consulting a policyholder attorney, a public adjuster, or your state department of insurance. They can provide guidance and protect your interests throughout the appeal process.
Prevent further damage
While appealing the denied claim, take reasonable measures to protect your property from further damage. For example, if there is roof damage, cover it with a plastic tarp to protect against bad weather. Keep records of any expenses incurred for these emergency measures, as your insurance company should cover these costs if your loss is covered.
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Frequently asked questions
Homeowners insurance generally covers mold and mildew if it is caused by a "covered peril", i.e., an event that your homeowners insurance policy will pay for, such as accidental water damage. For example, if your washing machine suddenly starts leaking and mould develops on the floor, your insurance will likely pay to remove the mould.
Standard homeowners insurance policies do not cover mould and mildew damage resulting from flooding or a lack of home maintenance. If mould has been growing for a long time, your policy will likely not cover the expense.
Contact your insurance agent as soon as possible. Keep the room well-ventilated and dry to prevent further mould growth, but do not try to clean or remove anything until an adjuster has reviewed all the damaged property.
