You’ve probably seen it happen on one of those home improvement shows. A young couple buys a home and begins renovations to make it their own style. They open a hole in the wall, start to pull down the sheet rock, and then the TV host yells, “Stop!” The music gets more intense and the new homeowners gasp in shock. There, in the inside of the wall, is a black speckled surface that smells like mildew or must. It’s mold. Does homeowners insurance cover mold losses?
There aren’t too many issues that will stop construction immediately, but asbestos, extensive termite damage, and mold are certainly some of them. According to the Center for Disease Control, individuals can experience a variety of reactions to mold exposure. People who are allergic can have nasal blockage, sneezing, itchy eyes or skin, or wheezing. Others may have trouble breathing or develop a fever. It may even cause children to develop asthma when they are exposed to it for extended periods. That’s why it’s important to eliminate any mold that you find as soon as it’s been discovered.
Mold is an all-too-common problem in homes. It thrives where there is moisture present for a sustained period of time. The bathroom could have poor ventilation and it can thrive in the ceiling or behind the walls; the basement could flood and it can begin to spread up the surfaces that were wet; the attic could be missing a proper vapor barrier, causing the insulation to dampen and collect mold.
Since mold is a prevalent problem, you may be wondering “Does homeowners insurance cover mold losses?”
Mold is a costly problem, both to your health and your wallet. If you discover mold in your home, it is important to take care of it immediately. The average cost to fix a home mold problem is between $15,000 and $30,000. According to one study, that is more that five times greater than the average home insurance claims that don’t involve mold.
Mold can mean a huge price tag. Unfortunately, the typical homeowners policy only covers between $1,000 and $10,000 in “mold remediation and repair”. On top of that, if flooding causes the mold, it won’t be covered at all. You will need to have a separate flood insurance policy in order to receive monetary assistance.
Every homeowners policy is different. As mentioned previously, some mold causes aren’t even covered unless you have flood insurance. That’s why it is important to read the language of your policy and review it with your independent insurance agent. There are often restrictions to your coverage based on the cause of the mold.
To insurers, there is a huge difference between mold caused by a sudden accident, and mold that develops slowly over time. A burst pipe that causes mold to develop will likely be covered under your homeowners insurance because your policy protects against certain named “perils”. These perils, like the broken pipe, are the cause of the loss, not the mold itself. If you neglect to properly maintain your home, then you may have an on-going moisture problem. You may only discover mold after years of having an improperly ventilated attic or other issue, and this will probably not be covered.
As with the “perils” category, “water damage and freezing” is another classification that will protect against mold losses. According to the Insurance Information Institute, 22% of homeowners insurance claims stem from this category. To understand if your mold problem will be covered under “water damage and freezing”, speak to your insurance agent.
Be aware that there are ways that the insurance companies can restrict the amount of money you receive as a result of a mold claim. These can include:
- Any mold that is not caused by a fire or lightning
- Only providing “buy-back endorsements” which can give you some mold protection, but at an extra cost
- Limiting the claim money available for mold loss
- Only covering certain aspects of mold expenses, like clean up or testing
- Not insuring homes for mold coverage if the home has had previous water-related damages
- Damage caused by rot, pollution, poor construction work or materials, poor repairs, and corrosion
You can improve your mold coverage under your homeowners policy by purchasing a rider. This is additional coverage under your existing insurance. The annual premium will range between $500 and $1,500 for the rider. If you live in a state that experiences more humidity or wetter weather, than the costs will be higher. Also, if your home is older, then it probably wasn’t built with any of the newest construction materials which are made to be mold resistant. As a result, your premium costs would be higher.
When you speak to your insurance agent about adding more mold coverage to your policy, he or she will ask you various questions to understand your specific situation. This will help to determine the specific costs for protecting your home.
Some companies also offer mold insurance that is completely separate from your homowners policy. This will be a significantly higher cost to you.
Control Mold Before It Controls You
Unfortunately, there is no way to completely escape exposure to mold. It can develop indoors and outside, as long as it has found a warm and humid environment. So, the best thing to do is to take action.
- When you experience any sort of water leak or water damage, attempt to make the area dry as soon as possible. Even if it’s as small as a spilled bottle of water on your carpet, make sure the area is dry within 48 hours. If the area is soaked and cannot be dried using fans and towels, then remove the carpet or other materials that have gotten wet.
- Keep the humidity levels in your home lower than 50%. If you live in a humid climate, consider purchasing a dehumidifier or an air conditioner. Your home should also have exhaust fans in areas that may have a sudden increase in humidity, like the bathrooms and kitchen.
- When remodeling your home, buy products that are mold-resistant or mold-inhibitors. All kinds of construction materials may be available, including paint and wood.
- Clean areas that are more susceptible to mold with bleach or other mold-killing chemicals. Keep your gutters free of leaf build-up.
- Have an inspector out to your home. Ask them to check your roof, attic, and basement for leaks.
Speak to an Agent
The best and easiest way to understand the mold loss restrictions of your homeowners insurance policy is to speak with your independent insurance agent. They will know the details of your policy and be able to answer any questions you may have. Your agent will also be able to recommend alternative insurance options or riders that you can add to your existing coverage to better protect against mold losses.
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Enhanced Insurance is not written by attorneys. If you’re looking for legal advice, you need to contact a lawyer. Further, insurance practices and forms change constantly and are varied from state to state. For definitive answers in your area, contact a local agent.
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