Costs Of Mold Damage Repair
If your homeowners insurance doesnt cover your homes mold damage, you likely pay out of pocket for repairs. A mold inspection is the first step because it identifies the source and extent of the damage and provides a repair estimate. An inspection costs about $200 to $600, though some companies offer a free initial inspection. Once you know the extent of the damage, you can decide if you want to tackle the cleanup on your own, or if you want to hire a professional.
If you pay for mold remediation, the cost depends on several factors, including the size of the impacted area and the amount of damage. Homeowners spend on average between $1,100 and $3,325 for mold remediation. Larger areas can cost as much as $6,000. If your whole house has mold damage, expect to spend between $10,000 and $25,000 per 1,000 square feet to remove it.
Choosing A Mold Assessor And Remediator
All non-exempt mold assessors and remediators must be licensed by the Texas Department of Licensing and Regulation . Be wary of possible conflicts of interest on the part of companies that provide multiple services. A person may hold licenses, but may not do both jobs on the same project. In addition, a person may not own an interest in both firms that do the assessment and the remediation on the same project.
Keep in mind there are exceptions to the licensing requirement.
Review all bids with your insurer to determine which costs will be covered. If your lender is involved in the process, make sure the bid specifics and payment schedule meet the lender’s requirements.
Check with TDLR to see if the contractors are properly licensed, and whether any complaints have been filed. Also do your homework on the companys reputation.
Some insurers may have a list of recommended mold specialists, but you must choose the contractor. Your insurer is prohibited from requiring you to use a specific company, but may assist you with your selection and with getting remediation work done in a timely manner.
After the contract is signed, licensed remediators are required to give you a Consumer Mold Information Sheet prepared by TDLR.
Under state law, a mold assessment must be done before remediation begins. Check your insurance policy to see if the remediation settlement should include the assessment cost.
Endorsement For Mold Coverage
If mold damage is excluded from your policy, including any damage caused by other types of bacteria or fungus growth, you may have to get an endorsement that adds coverage for it. An endorsement, also known as a rider, is additional coverage that either enhances the coverage contained in the base policy terms by adding more covered perils or increasing the limits of liability the amount the insurer has to pay you for a given claim for existing covered perils.
One of the most common endorsements is for floods, since floods are almost always excluded from renters insurance coverage. Earthquake endorsements are also common, and necessary if you live near a fault line.
The mold damage endorsement removes the exclusion for mold and other spore- and bacteria-based damage from the covered peril for water discharge by adding coverage for such damage up to a certain limit of liability. While it may vary from insurer to insurer, a typical limit of liability for mold damage is $5,000.
Zack Sigel is a former managing editor at Policygenius who oversaw our mortgages, taxes, loans, banking, and investing verticals.
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How To Avoid Having A Mold Damage Claim Denied
There are several things you can do to prevent mold and/or improve the odds of having your claim approved if you incur mold damage.
On the prevention side, you can:
- Install dehumidifiers in areas that are prone to dampness
- Regularly check plumbing pipes and fittings to look for leaks
- Adequately ventilate bathrooms, laundry rooms, kitchens, and other areas of your home where mold may have an opportunity to grow
- Keep gutters clean to prevent the formation of ice dams in winter, which can lead to leaks
- Regularly inspect your roofand around windows and doorsand caulk cracks that could allow water to leak in
- Properly insulate interior and exterior pipes in winter to avoid breakages or leaks
- Routinely check appliances and hot water heaters for signs of leaks
If you have to file a claim for mold damage:
- Properly 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 mold removal companies to clean up the damage
Mold And Home Owners Insurance
- Reduce indoor humidity by using dehumidifiers
- Make sure that every exhaust fans in your bathrooms are connected and exhausting outside
- Ensure that there is enough or not too much insulation in your attic
- Make sure that there is sufficient airflow throughout your home
- Be sure that the soffits in your attic are not blocked
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What If My Claim Is Denied
The most likely reasons mold claims are denied are because they are caused by an uncovered peril, or are found to be caused by owner negligence. If you have direct proof of the cause, its best to submit that information when filing your initial claim this will help prevent any miscommunication or misunderstanding.
Making An Insurance Claim
In general, your insurer must begin an investigation within fifteen days after you file a written claim. The company may ask you for more information, and has another fifteen days after you send the information before it must accept or reject the claim. If the company agrees to pay the claim, it must do so within five days. If the company rejects the claim, it must give you the reasons in writing.
It is common for an insurance settlement check to be made out to both the homeowner and the mortgage company. Some mortgage companies will endorse the check to the homeowner, leaving the homeowner to arrange for remediation. Otherwise the lender usually uses the insurance checks to pay the contractor, with an inspector monitoring the work and releasing payments. Consult with your mortgage company about how involved it will become with the remediation work. If the company oversees the work, you should still understand who is responsible for ensuring the job is done properly, and the extent of your liability. Remain active in this process.
Remediation is more than just repairing damage caused by mold. It involves the process of evaluating the situation before repair work begins. It also involves removing and cleaning items contaminated with mold, treating potentially affected areas, and ensuring that mold does not reoccur.
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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
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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What To Do If Your Mold Claim Is Denied
If your homeowners insurance company denies your mold claim, you may want to get a licensed contractor to offer a second opinion on what caused the damage. You could also attempt to appeal the denial with your insurance company if it has a specified appeals process. If not, your state insurance commissioner may be able to offer help on what you can do to get the claim approved or to file a complaint about denial.
Examples Of Situations When Mold Damage May Be Covered2 3
Here are some scenarios in which you would be covered for resulting mold damage2, 3:
- Malfunctioning appliance, such as a washer or dishwasher, causing a leak
- Burst or frozen pipe
- Broken water heater
- Water damage caused from extinguishing a fire
Its important to note that for situations such as these, the mold is resulting damage not initial damage. That means your insurance can help you with mold remediation and repairing your floors or walls, but it will probably not replace a broken appliance. Your policy might also have a cap on the amount it pays toward mold removal, which may not cover all of the mold damage.2
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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.
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 policy’s limit. You’ll first have to pay your policy’s 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 insurer’s 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. That’s why it’s important to take photos and document the damaged areas. Be sure to keep records of the repairs made, as well.
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Flooding And Acts Of Mother Nature
In cases where mold results from water damage brought on by storm surges or flood waters remediation is not typically covered in a standard homeowners insurance policy. Flood damage is typically covered in a separate flood insurance policy.
In the case that you do have a flood insurance policy and your home floods, your policy still likely does not cover mold removal or remediation in all cases. An additional mold rider may be worth looking into. Check with your insurance carrier for more information.
For Example: Flood insurance from the National Flood Insurance Program will not cover damage from mold, except for very rare circumstances, such as when floodwaters remain in the area and prevent you from inspecting and maintaining the home, or when an authorized official bans entrance to the area.
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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When Is Mold Damage And Removal Covered By Homeowners Insurance
Insurance carriers are very clear about whether homeowners insurance covers mold damage and removal. Some policies do not cover mold at all. Say you’re located in an area that regularly floods or live near the ocean. Mold from water damage or humidity is such a predictable occurrence that insurers don’t want to pay for its removal.
When an insurance company does cover mold, it is only under certain conditions. In a nutshell, it all comes down to what caused the mold and whether the thing that led to mold is covered under your policy.
Let’s say your house caught on fire and the fire department sprayed tons of water putting it out. However, because the property remained damp after the fire department left, there is mold in the basement and main house. Does homeowners insurance cover mold? In this case, because fire damage is covered, so is mold resulting from the fire.
Here’s a sample of situations in which mold is likely to be covered:
- A leaking pipe that you have not attempted to repair
- Any type of flooding, unless you carry flood insurance
When Mold Is Not Covered
Your insurer wont cover a claim resulting from neglect. For example, if your showerhead has continuously leaked for months resulting in water damage and, consequently, mold. Or if your window is not properly sealed and rain leaks through continuously over time leading to mold growth. Claims are more likely to be rejected if mold is caused by neglected home maintenance: long-term exposure to humidity, or repeated water leaks and seepage.
Also, no mold damage resulting from a flood would be covered since flooding is a peril excluded from your homeowners insurance policy. However, if you purchased a separate flood insurance policy, that coverage would typically extend to any mold damage caused by a flood.
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When Does Homeowners Insurance Cover Mold
Since most homeowners insurance policies provide limited mold-related coverage, there are certain things you can take into account to avoid the exorbitant cost of trying to get rid of mold.
Mold is a fungus thats present almost anywhereboth inside and outside the house. However, some mold forms are deemed more hazardous than others like the black mold stachybotrys which can cause severe illness.
Typically, mold, fungus, mildew, and spores are covered by home insurance if its the result of a specific problem covered by the policy. One example would be water damage from a burst pipe that results in mold.
In essence, to make a successful mold claim, you need to prove that the molds damage was accidental and sudden when you found it, and it was reported promptly. This is one of the best ways to ensure the insurance provider covers the damages.
Still, most mold coverage will likely be limited to $10,000. In certain instances, mold coverage can be added in exchange for a premium increase. Most homeowners insurance policies come with a long list of exclusions that are related to mold damage.
Some policies may also come with exceptions to the exclusions and provide minimal coverage for mold contamination. Typically, homeowners insurance wont cover any damages from mold if caused by:
Long-term leaks that were not repaired Typical wear-and-tear Water or moisture from construction