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Prepare Yourself For The Task Ahead
Usually, home insurance companies do not enjoy paying claims related to mold damage without adequate proof. When you find out one, you should be prepared to advocate for yourself and prove that the damage resulted from a covered peril. One way to be sure you are ready is to request an investigation into the cause of mold damage. Then take pictures of the mold. It is important not to attempt to start repairs before calling your insurance company or filing a mold claim.
Water Damage Due To Broken Or Leaky Pipe
Homeowners insurance does not usually cover water damage due to something like a leaky pipe. If your insurance policy doesnt cover the damage due to the leaky pipe, it probably will not cover a mold problem caused by leaky pipe, either. Some insurance policies will pay for damage resulting from a burst pipe, though, and in that case, they may cover a mold problem resulting from that burst pipe, as well.
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Water Damage Following A Flood
Mold is a common occurrence after a home has been flooded. Homeowners insurance often does not cover flooding, unless you specifically purchase flood insurance. If your insurance policy does not cover flooding, it probably will not cover mold that results from flooding. It may, however, cover mold following a flood if you have flood insurance. If you live in an area prone to flooding, this is definitely something you should look into.
When Does Home Insurance Cover Mold
The question of whether home insurance covers mold depends on the type of damage and the cause. Typically, homeowners insurance covers mold if the mold growth was caused by what is termed a covered peril. This means that the mold will be covered if it was caused by damage that has been covered by insurance.
The range of covered perils that may result in the insurance coverage of mold removal and repair includes
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How To Submit Mold Insurance Claims
If a mold situation arises as a result of a covered peril under your homeowners policy, you can submit a mold insurance claim. If approved, the insurance company pays for the loss, up to the policys limit. Youll first have to pay your policys deductible, however.
When filing a claim under your homeowners policy or mold damage rider or endorsement, keep these guidelines in mind:
- If safe to do so, try to stop the leak or water flow.
- Document what happened and why, as well as the date and time.
- Take photos of the damage, if it is safe to do so.
- Take inventory of what was damaged or permanently lost.
- If possible, leave everything as is until the insurers claims adjuster arrives.
In many cases, the covered peril claim and the mold damage claim are treated as one claim by your insurer. When a great deal of water is involved, the insurance company usually sends a mold remediation team to dry out your home to prevent mold.
However, mold can start growing months after the incident occurred. Thats why its important to take photos and document the damaged areas. Be sure to keep records of the repairs made, as well.
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When Does Homeowners Insurance Cover Mold
Most causes of pervasive mold growth in homes is due to excessive moisture from water leaks and high humidity. These forms of water damage are not covered by homeowners insurance, as home insurance doesnt cover maintenance issues or damage that occurs over time, like gradual water leaks. But there are instances where water damage and the resulting mold contamination may be covered by homeowners insurance.
A standard homeowners insurance policy lists mold, fungus, and wet rot as exclusions, unless under the following conditions:
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The mold is hidden within the walls, ceiling, or beneath the floors
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The mold growth results from the accidental discharge or overflow of water or steam like a burst pipe or water heater
Mold can begin to form anywhere from 24 to 48 hours after an incidence of water damage, so if youve recently had a pipe burst or appliance malfunction, make sure the affected areas are completely dry.
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Does Homeowners Insurance Cover Mold
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Key takeaways
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A homeowners policy generally covers mold only if its caused by a covered problem such as a burst pipe.
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Homeowners insurance wont pay for mold remediation due to flood damage.
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There are certain types of coverage you can add to your homeowners policy to pay for some mold damage.
Whether mold damage is covered by your homeowners insurance policy largely depends on the cause of the mold. If you do find yourself up against mold damage, here are the options that may be available to you.
When Mold Is Usually Covered
In most cases, if mold results from a sudden and accidental covered peril, such as a pipe bursting or the dishwasher overflowing, the cost of the mold remediation should be covered. Thats because technically the pipe burst or faulty dishwasher is the reason for the claim not the mold itself.
Another example is a house fire. Lets say fortunately the firefighters arrived in time to keep most of your home intact. However, due to the water from the fire hoses your home has developed mold. That could be covered by home insurance.
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How Much Will Insurance Cover For Mold
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 state a maximum limit of between $1,000 and $10,000 for mold remediation.
If you want to purchase 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 Is Mold Covered By Home Insurance
A standard HO-3 homeowners insurance policy lists mold, fungus or wet rot as exclusions, unless under the following conditions: the mold is hidden within the walls, ceiling, or beneath the floors, if the mold growth results from the âaccidental discharge or overflow of water or steamâ. Mold can begin to form anywhere from 24 to 48 hours after an incidence of water damage, so if youâve recently had a pipe burst or appliance malfunction, make sure the affected areas are completely dry.
Here are a few real-world examples where that may happen.
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Mold Coverage: The Finer Details
Claiming mold damage on your insurance policy means doing your homework in at least 3 ways, which are detailed here.
Not only do you want to know how much damage repair your policy will cover , youll want to check with your homeowners insurance company if youll be responsible to pay two deductibles one for regular damage and one for mold repair if that is their mold policy.
Finally, you also need to have separate flood insurance if you dont want to pay for mold remediation because a flood damaged your home.
1. Know how much coverage you have and if you can increase it. You should check your policy for the mold removal and remediation cap, or the amount of money that your insurance company is willing to pay for mold remediation. Because mold treatment can garner a hefty tab, insurance companies reduce their risk by building a cap into the policy. For example, policies will list a maximum limit of $1,000 to $10,000 per claim for mold removal.
Ask your insurer about endorsements to improve your mold coverage. They cost more, but theyre worth it if youre in a humidity-prone environment.
Also, if you file a claim for mold coverage and it is denied, get a contractor to inspect your mold infestation and offer a second opinion to assist with your appeal of the denial. Contact your state insurance commissioner for help with filing a complaint about denial.
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Does Homeowners Insurance Cover Mold Removal
Whether home insurance covers mold removal depends on the damage, policy and insurance company.
“Frequency of coverage is difficult to answer. Coverage will vary by carrier and individual policy. Most carriers that do offer mold coverage have limits that typically start around $2,500 to $5,000 and can go up from there it depends on the individual policy and what the customer is willing to pay for from a premium standpoint,” Ragsdale said.
One situation in which a home insurance company will cover the insurance claim is during winter. For instance, a home insurance company will likely cover water damage caused by an ice dam because it falls under the “covered peril and timing” part of your policy.
“If a leak occurs but goes unattended for an extended period of time and mold begins to grow, it may not be covered. However, if an ice dam forms in the winter, water leaks into the attic for a short period of time and mold begins to form before the damage becomes apparent, then it may be covered. Mold coverage is strictly determined by the investigating adjuster,” Ragsdale said.
Basically, homeowners insurance will protect you if there is damage to the actual home or its contents. There are exceptions, though.
Some issues usually not covered by home insurance and will likely prove unsuccessful as a mold claim include damage from a flood, sewer backup or water seeping from the ground.
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Mold Caused By Negligence
Home insurance companies usually deny claims when the investigation determines that negligence caused the damage. Negligence is not a named peril, and therefore mold damage caused by it would not be covered under your homeowners policy. For example, if your dishwasher is leaking and you do not tend to it right away, any resulting damage from the leak can be denied by your insurer, leaving you to pay out of pocket for the repairs.
Does Home Insurance Cover Mold Remediation
Mold remediation is also only covered if the mold was caused by a covered peril, such as a burst pipe exploding and causing mold to grow inside the walls of your home. While removal and remediation are similar, mold remediation coverage also applies to replacing any personal belongings that were damaged by the mold.
So lets say burst pipe created mold that was covered by your insurer. If that mold damaged the interior drywall and spread to the carpets and couch against the wall, your policys dwelling coverage would pay to repair the drywall and carpets, while your policys personal property coverage would pay to replace the couch.
Mold remediation can cost upwards of $30,000 or more, depending on the size and severity of an affected area within a home. Its important to always be on the lookout for any instances and scenarios that could cause mold to grow throughout your home.
If you smell a musty odor in certain areas of your home or notice water spots in the ceiling, walls or floors, its important to call a professional as soon as possible so they can inspect the damages. If you spot damage but do nothing about it for an extended period, your home insurance company has the right to deny a mold insurance claim that otherwise wouldve been covered.
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Mold Caused By Sewer Backup
Water damage caused by a sewer backup is not a covered peril on a standard homeowners policy. However, most property insurers will offer an optional sewer backup as an endorsement. If you have purchased the sewer backup add-on, your policy may extend coverage to mold resulting from the sewer backup through the mitigation process, but generally, mold caused by a sewer backup is not covered. In this case, you may want to inquire about a separate mold rider or mold policy.
Example Scenarios When Mold Damage May Not Be Covered
You probably wont be covered if mold forms in your home due to1, 2:
- A poorly ventilated bathroom or kitchen causing an increase in humidity
- Improper sealing around the base of a toilet or shower, allowing water to seep through the floor
- Dirty or broken roof gutters forcing water to flow over other parts of the house
If your insurance deems that your mold damage was preventable, then you may end up paying entirely out of pocket to make your repairs.
Even when mold damage is beyond your control, your insurance may still not provide support. Flooding, for instance, isnt usually covered in a standard homeowners insurance policy and often requires having flood insurance.2 If youre in a high-risk area, this could be a worthwhile purchase or it may even be required by law.4
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Do You Need Mold Remediation Insurance
Anyone can experience a household mold problem. Mold typically grows in damp places, so you can help prevent mold growth by repairing any leaky pipes, leaky window frames, or leaks in your roof right way. Make sure you have adequate ventilation in your bathroom when you shower turn on a fan or open a window if necessary. If your basement feels damp or has a musty odor, use a dehumidifier. While these preventative measures can help prevent a mold problem from developing, they are not a guarantee that it wont happen. Buying insurance for mold remediation is the only way to make sure youre protected if a problem does occur. Keep in mind that mold remediation can cost $15,000 or more, depending on the severity of the problem.
If you live in an area with a lot of heavy storms, your home may be more likely than average to suffer storm damage. If heavy winds or a falling tree limb damage your roof, for instance, during a storm, youre going to end up with water damage. Mold may result. If you live in such an area, you may want to seriously consider purchasing mold remediation insurance. Youll have to weigh the risks of a mold problem against the cost of the insurance.
When Does Insurance Not Apply To Mold Damage
There will be scenarios when your home insurance will not cover mold damages. For instance, as stated before, your insurance provider will not approve your claim when mold damage has been caused because of your lack of attention. If the mold could have been controlled by the homeowner, the insurance policy doesnt apply.
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How To File Mold Insurance Claims
You can file a mold claim the same way you file a regular homeowners insurance claim, with a few slight adjustments. To improve your chances of a successful claim, you need to take every step possible to prevent mold from forming. That way, the claims adjuster can see that youve acted responsibly to mitigate the damage, even if unavoidable mold begins to form. Before filing a claim:
- Dry all affected areas as quickly and thoroughly as possible
- Stop leaking pipes by shutting off the water to your house
- Remove soaked items such as carpeting, furniture, insulation and mattresses
- Open doors and windows and use fans to promote faster drying
- Clean all affected areas with detergent to prevent bacteria spread
- Cover damaged areas such as a hole in the roof or a broken window
- Take photos of all damage, including closeups and wide shots
- Contact your insurance agent to file a claim
If your policy doesnt exclude mold damage for covered losses, its best to separate the mold repair expenses from other repair costs. For example, if storm damage soaks the drywall in your bedroom and mold forms, the contractor likely will charge you a mold remediation fee. List the mold remediation fee separately from the drywall removal costs. By separating the expenses, you can minimize the risk of a claim denial if the insurer doesnt want to pay for mold remediation.
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