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Is Mold Covered In My Policy

Posted by Joe Brennan | Posted in Homeowners Insurance, Insurance Advice, Insurance Claims Help | Posted on 03-06-2014


moldMold Claims Are A Major Insurance Issue

A fairly new and significant issue affecting insurance carriers and their policyholders is mold. For the past 15 years or so, the awareness of mold has escalated in major proportions. The cost of this awareness has skyrocketed tremendously. The world wide web and the media have fueled this awareness making policyholders far more diligent in locating and removing mold than they ever considered before. Due to such, entire mold remediation and mold education industries have awakened. As with any expensive risk or peril, property insurers have swung another “left hook” by adding exclusions, endorsements, and uncovered limitations to insurance policies they sell.

An article by James M. Levin and Reed Smith, “Does Mold Constitute a Direct Physical Loss under a Property Policy?” is about a commercial property that suffered mold damage and how the court ruled on the issue. His conclusion is thought provoking and states,

“Conclusion – Insureds faced with mold claims should evaluate very carefully what property is damaged and the appropriate level of remedial measures. To the extent that moving out of the insured premises is necessary, the insured must make a satisfactory claim, supported by admissible expert evidence, that the move was necessitated by tangible damage to insured property. While moving out of potentially mold-infected premises may make business sense from the standpoint of protecting employees and making sure employees are comfortable with the working environment, a business decision is not necessarily covered by property insurance.”

Is Mold Covered In My Policy?

Is it covered or is it not covered? Your policy and endorsements will tell the story. For example; NC has an endorsement (modified much over the years) that in summary means, “Seepage over weeks, months, or years that causes rot or mold is excluded, unless it’s the result of a covered loss”, then there is a limit of $5,000. Where GA policies excludes most mold issues, unless the mold is a result of Fire. Then there is no limit AT ALL. So, it’s very important to know your policy. In the event of a loss you should request in writing a “Certified True”copy of your policy from your carrier. If the language of the policy if foreign to you, consider help from a public adjuster or insurance claims consultant.

Inspect your property once or twice a year for all types of maintenance as well as mold issues. Preventive maintenance for homes and buildings are just as import as that 3,000 to 5,000 mile oil change we diligently provide for our engines… it’s a hell of a lot cheaper to catch it early too!


Related Stories:
Home Owners Insurance: Is Mold Covered?
CDC – Facts About Mold
EPA – Mold Clean Up Guidelines

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(C) Joe Brennan is President and owner/operator of Insurance Claims Group, Inc., a national independent adjusting, appraisal, and umpiring firm. We will answer your claim questions FREE as part of our FREE Insurance Advice and Insurance Claim Consulting Services.

Insurance Claims Group, Inc.
Joe Brennan
Ph: 919-669-9111
Fx: 919-573-9595

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