Mold: Insurance Structure Or Not?

Whether or not mould is considered a structure on insurance depends on the insurance company and the type of policy. Most insurance companies cover mould damage if it was caused by a covered peril, such as a burst pipe or a malfunctioning appliance. However, mould damage caused by flooding or neglect is typically not covered by standard homeowners insurance policies. Homeowners may need to purchase additional coverage or a separate flood insurance policy to protect themselves from mould damage.

Home insurance companies cover mould if it appears suddenly

Home insurance companies may cover the cost of mould removal if it appears suddenly and is caused by a "covered peril", such as a burst pipe or a malfunctioning appliance. Mould that is the result of flooding or poor maintenance is generally not covered by standard home insurance policies.

Home insurance policies typically cover mould damage if it is caused by a "covered peril", meaning an event that the insurance company will pay for, such as water damage from a burst pipe. Mould that appears suddenly as a result of a covered peril is usually covered by home insurance. For example, if a washing machine suddenly springs a leak and mould develops on the floor, a homeowner's insurance policy will likely cover the cost of removing the mould.

However, mould that is the result of flooding or poor maintenance is generally not covered by standard home insurance policies. Flooding is typically excluded from homeowner's insurance policies, and mould caused by neglect or a lack of regular upkeep is not usually covered.

It is important to note that even if mould is caused by a covered peril, there may be limits to the amount that insurance companies will pay for mould removal. Additionally, homeowners may need to pay a deductible towards the cost of mould removal.

Mould damage is covered by insurance if it's related to a covered peril

A covered peril is an incident that is listed in your insurance policy as something that you are eligible to file a claim for. The main cause of mould formation is water seeping into the structure of your home, so you need to know which water-related covered perils are included in your policy. For example, your policy may cover you if mould results from any of the following:

• Water leaks associated with a malfunctioning appliance
• Water damage caused by a burst hot water heater
• Water damage caused by firefighters extinguishing a fire in your home

In these instances, mould would be considered "resulting damage" from a covered peril. It's important to distinguish between resulting damage and initial damage. For example, if your water heater breaks and a leak causes mould to form in the walls, your policy might pay for the walls to be repaired and the mould to be removed, but not for the replacement of the hot water heater.

If the mould damage is not related to a covered peril, then it will not be covered by your insurance policy. In this case, you will be responsible for the cost of remediation and removal. Mould damage that is not typically covered by insurance includes:

• Mould damage that cannot be linked to any covered damage
• Damage from poor maintenance or negligence
• Flooding
• Long-term wear and tear
• Sump pump overflow
• War and earthquakes
• Government confiscation
• Vandalism on a vacant property
• Intentional damage

How to file a mould damage insurance claim

If you need to file a mould damage insurance claim, there are several steps you should follow:

• Contact your insurance company and make a claim
• Document the damage with photos and/or video
• Provide up-to-date maintenance records if you have them
• Follow any and all instructions the insurance company gives you to process the claim
• Contract approved mould removal companies to clean up the damage

Flood damage caused by mould is not covered by standard home insurance policies

Mould is a type of fungus that thrives in damp, humid environments. It can cause extensive damage to property and even impact the health of those exposed to it. While standard home insurance policies typically cover mould damage, this coverage has limitations and usually excludes flood damage.

Understanding Mould Coverage in Home Insurance

Home insurance policies often include a list of "covered perils," which are specific events or instances of damage that the policy covers. Mould damage is generally covered if it results from a covered peril, such as sudden water leaks or bursts caused by malfunctioning appliances or broken pipes. However, there are important distinctions between resulting damage and initial damage. For example, if a water heater breaks and leaks, causing mould to form in the walls, the policy may cover the cost of repairing the walls and removing the mould but not the replacement of the water heater.

Flood Damage Exclusion in Standard Home Insurance Policies

Standard home insurance policies typically exclude flood damage, and this exclusion extends to mould damage caused by flooding. Flooding is generally defined as scenarios that affect multiple properties, such as overflowing rivers, tidal surges, or runoff from heavy rainfall. To obtain coverage for flood damage and related mould issues, a separate flood insurance policy is necessary.

Additional Coverage Options for Mould Damage

While standard home insurance policies may not cover mould damage caused by flooding, there are additional coverage options available:

• Water backup coverage: This type of coverage is often offered as an add-on to standard policies and covers mould formation due to failed sump pumps, backed-up drains, or clogged sewer lines.
• Hidden water damage coverage: This coverage is also available as an add-on and applies to mould caused by leaks that are not easily visible, such as those within walls, floors, or behind appliances.

Preventing and Mitigating Mould Damage

To prevent mould growth and minimise potential damage, it is essential to control moisture levels in the home. This can be achieved by using ventilating fans, dehumidifiers, and proper ventilation in areas prone to dampness, such as bathrooms and kitchens. Regular maintenance and prompt repair of any water leaks are also crucial in preventing mould issues.

Poor maintenance or failure to complete repairs will result in paying for mould remediation yourself

Mould is a fungus that thrives in areas with high moisture. It can cause serious health issues for those exposed to it, and it can also cause structural damage if left untreated. It is therefore important to act quickly to prevent mould from spreading and causing further damage.

If you are a homeowner and you discover mould, you should check your insurance policy to see if mould damage is included. If it is not, or if the mould is the result of poor maintenance, you will need to pay for mould remediation yourself. This can be expensive, with costs ranging from $1,125 to $3,439, with an average cost of $2,254.

To prevent mould from growing in your home, it is important to control moisture levels, fix any leaks, and ensure proper ventilation. If you do discover mould, it is recommended to hire a professional mould remediation company to remove it safely and effectively.

You can add additional mould coverage to your home insurance policy

Yes, you can add additional mould coverage to your home insurance policy. This is known as a "rider" or "endorsement".

Home insurance policies typically cover mould damage only if it is the result of a "covered peril" – an event that your policy will pay for, such as water damage from a burst pipe. Mould damage caused by flooding, for example, would need to be covered by a separate flood insurance policy.

Mould damage can cost between $15,000 and $30,000 to remediate, so insurance companies have reduced the amount they will pay. Typically, policies state a maximum limit of between $1,000 and $10,000 for mould remediation. If you want to purchase mould coverage above that amount, it can usually be added as an optional rider, but this can be expensive.

If you live in an area prone to mildew or high humidity, you may need more routine maintenance to prevent moisture and mould. Even if you meticulously clean your property, mould could go unnoticed and cause extensive damage before you spot it. There may be some coverage options.

If you are making a claim to your own insurer for damage to your property, you are making a "first-party" property claim. If you are asking your insurer to investigate or defend a claim against you – for example, if your tenants are suing you for mould contamination – you are making a "third-party" liability claim.

Most property policies have a long list of exclusions for damage caused by mould, dry or wet rot, corrosion, pollution, wear and tear, deterioration, faulty workmanship and materials, and construction defects. To make matters more complicated, some policies have limited "exceptions" to these exclusions, which may provide very limited coverage for mould contamination.

In several US states, insurance regulators are developing rules to permit insurers to provide minimum mould contamination coverage (e.g. $5,000 property limits) unless the policyholder buys more expensive coverage separately.

Frequently asked questions