Mold damage is a common exclusion from most home insurance companies. Homeowners are responsible for maintaining their property, and insurers believe damage from mold, dry or wet rot, and rust can be prevented with basic household maintenance. However, mold resulting from a covered peril is likely to have limited coverage, and some insurers allow policyholders to purchase coverage for mold removal via endorsement.
Does home insurance cover mold?
In most cases, home insurance does not cover mold. Depending on whether you have named or open risk insurance, your insurance company will explain in your policy which perils are or are not covered. Standard insurance covers perils such as lightning, fire, hail, explosion, vandalism, theft, falling objects, and snow weight. Water damage and its secondary effects (such as mold) are a bit more complicated.
Whether your homeowners insurance covers mold damage depends on how your policy covers water damage, as well as mold removal and remediation. (Note that remediation is often considered a separate issue by insurers.) Check the water damage and mold clauses in your policy documents to see if mold and mold removal are included or excluded from coverage. If you purchased a mold coverage add-on, your coverage should be detailed in the endorsements section.
learn more: What does home insurance cover?
Mold caused by covered hazardous materials
Your home insurance may cover mold damage caused by a covered peril. For example, if a tree branch breaks a window in your home during a windstorm, causing water to flood the floors and walls, you may be covered. Even if you dry the area as much as possible, it can take up to 18 days for mold to become visible to the naked eye. Because the windstorm was a named peril, your insurance may pay to repair the damage. Similarly, if a burst pipe causes extensive water damage and mold, your homeowners insurance may cover mold removal as part of the mitigation measures to restore your property. Coverage is subject to your deductible and any mold coverage limits your property insurer may have in place.
Flood mold
Flooding is one of the leading causes of mold damage because it can take a long time for mitigation efforts to begin after a flood. According to the Environmental Protection Agency (EPA), mold growth can begin within 24 to 48 hours after flood damage. Unfortunately, flood damage is not a specified peril covered under standard homeowners insurance.
Homeowners insurance will not cover mold in most flood cases unless separate insurance or coverage for flood damage has been purchased. The exception is if coverage for mold damage or restoration is included, which will also be detailed in your policy.
If you purchase flood insurance through the Federal Emergency Management Agency’s National Flood Insurance Program, your policy does not cover mold. Flood insurance from private insurers may vary.
Mold caused by sewage backflow
Water damage caused by sewer backup is not covered under a standard homeowners insurance policy. However, most property insurance companies offer optional sewer backup coverage, usually called backflow water and sump pump overflow coverage. If you purchase this additional option, mold caused by sewer backup may also be included in your coverage and may be covered through the mitigation process. However, mold caused by sewer backup is generally not covered.
Mold caused by construction or repairs
Home insurance doesn’t typically cover mold caused by shoddy construction, repairs, or poor quality building materials. If repairs are covered under your insurance claim, it may be covered because it takes time for mold to develop. However, let’s say you discover mold in the walls of an extension you just built onto your home. In this case, your insurance won’t cover the mold because the direct cause isn’t a covered hazard. Instead, you’ll need to seek compensation from the contractor or company you hired to do the work.
Mold caused by carelessness
Home insurance companies will usually deny a claim if, after an investigation, it is found that negligence caused the damage. Errors and wear and tear are excluded from all home insurance policies. Therefore, mold damage caused by negligence will not be covered. For example, say it rains heavily and you accidentally leave your living room window open, letting in several inches of water and causing mold to grow on your carpet. This will not be covered by your insurance and you will have to pay for the repairs out of pocket.
Why isn’t mold coverage part of a standard home insurance policy?
Industry standard coverage for mold changed nearly 20 years ago in response to the frequency of mold claims. In the late 1990s, several health reports were published outlining the possible health effects of mold presence in the home, creating a public fear known as the “mold phobia.” At the time, the terminology defining mold coverage in insurance policies was vague, and with mold removal costing between $10 and $25 per square foot, insurers struggled to keep up with the surge in costly mold remediation claims.
Around 2002, the International Organization for Standardization developed language that all U.S. states use to clarify and limit mold coverage, and also provides a mechanism for insurance companies to provide a way for policyholders to purchase extended coverage.
How is mold covered?
There are two types of mold claims: first-party and third-party. First-party claims are claims for mold removal and repairs to the physical parts of the home, usually your residence, personal possessions, and additional living expenses. Third-party claims are liabilities related to mold. For example, a house guest may get sick because of exposure to mold in your home and incur medical expenses. Mold claims may also be paid on a per-claim basis or up to the aggregate limits of your policy, depending on how your insurance company defines coverage.
It’s important to read your policy carefully and work with your agent to select the right level of mold coverage for you, as it varies by insurance company. Chubb, an insurance company that specializes in luxury homes, offers coverage for mold remediation caused by covered perils as part of its standard policy, with the option to purchase more coverage, and allows policyholders to use their existing liability limits for mold claims. Allstate offers limited mold coverage up to $5,000 as part of its policy.
Some providers offer separate limits for first-party and third-party claims, such as $2,500 for repair costs and $5,000 for liability. Common increased limit options are $25,000 and $50,000 for first-party coverage and up to $100,000 for third-party coverage.
How to file a mold insurance claim
A mold claim can be made in the same way as a regular homeowners insurance claim, with a few adjustments: To increase the chances of your claim being successful, you should take every step to prevent mold from growing.
If a leak occurs, disinfect and dry the area immediately. Most home insurance policies include coverage for reasonable repairs up to a certain limit. Coverage can be used to move personal belongings to a safe location to prevent further damage, or for materials needed to remove the water and prevent mold growth. Consider renting a commercial wet/dry vacuum and portable heater from a local store. Taking the necessary precautions will assure the claims representative that you acted responsibly to mitigate damage, even if the inevitable mold begins to appear.
Before you submit a claim:
- Shut off the water to your home and stop leaking pipes.
- Cover any damaged areas such as holes in the roof or broken windows.
- Take photos of all damage, including close-ups and wide shots.
- Dry all affected areas thoroughly as soon as possible.
- Remove any wet items such as carpets, furniture, insulation and mattresses.
- Open doors and windows and use fans to speed up the drying process.
- The entire affected area is washed with detergent to prevent the spread of bacteria.
- Please contact your insurance agent to file a claim.
- Please keep your receipts so the adjuster can reimburse you for reasonable repair costs.
Mold can develop within 24 to 48 hours and become visible within 18 to 21 days, even if you take all preventative measures, especially if you live in a humid area. If mold is still present after repairs, contact your insurance claims agent. If you keep records of your repairs, your insurance company should be able to pay for mold remediation costs up to your policy limits, as long as your policy allows for mold claims.
How to prevent mold in the home
Mold is not only a household nuisance, but it can also cause serious health problems. According to the Centers for Disease Control and Prevention, people with allergies, illnesses that weaken the immune system, and respiratory diseases are at greatest risk to health from mold.
Mold is a common problem, but proper maintenance can prevent it from getting out of hand. You can often smell mold before you see it, or feel a slimy substance when you touch a surface. Dried mold can grow on linens and pillows, or around dressers, shelves, and heating and cooling vents. To prevent mold, follow these lifestyle and maintenance tips regularly:
- Dry any spills immediately.
- Regularly check pipes and appliance hoses for leaks and, if possible, replace hoses before leaks occur.
- Clean non-porous surfaces, such as bathroom tiles and ceramic floors, with a mold-killing product, such as bleach.
- Porous surfaces such as wood can be cleaned using a bleach alternative, such as a mixture of hydrogen peroxide and water.
- Install exhaust fans in your kitchen and bathrooms.
- Keep the humidity level in your home between 30 and 60 percent.
- Paint the walls and ceilings with a paint that contains a mold inhibitor.
- Remove carpeting from damp areas such as bathrooms and basements.
- Do not allow water to stand in the water tank of your houseplant.
- Check your roof and attic for water intrusion and make repairs immediately if necessary.
- Clean any debris from your drains to ensure proper drainage.
- Seal windows and doors to prevent water intrusion and keep out moisture.
- Wait for the areas affected by the leak to dry completely before replacing any drywall or flooring.
