Whether it’s from a small water leak behind a wall or an improper repair job after a flooding incident, mold destroys properties slowly and subtly. By the time you discover it, it’s often too late. But despite the damage mold can cause (and how common mold is), homeowners insurance carriers often have very strict policies for mold damage coverage.
Does that mean policyholders are always stuck with weeks of remodeling and a huge repair bill? Not necessarily. From technical jargon to the limits of insurance remediation for mold, let’s dive into everything you need to know about mold and insurance claims.
Key Takeaways
- Mold is typically only covered if it’s the consequence of a “covered peril” in your policy
- There is usually optional mold damage insurance you can add to your policy
- Mold from major disasters like floods is not usually not covered
- Even if an insurance carrier initially doesn’t provide remediation, you can work with a public adjuster to negotiate
When Does Homeowners Insurance Cover Mold?
Homeowners and business insurance carriers are no different, so they’re selective about when they will cover mold damage.
When it is covered:
When your washing machine or water heater breaks and mold grows in a patch of floor that was soaked with water, insurance will pay. That’s because that event is seen as a “covered peril.” Depending on the level of damage, they will either pay for cleaning off the mold or for replacing that part of the floor entirely.
When it isn’t covered:
If it’s caused by a lack of upkeep or design flaws, it probably isn’t covered. That includes mold growing in places with ventilation, cracked windows, and humid climates.
Carriers also don’t cover events that cause damage to multiple properties, much less the mold damage that inevitably follows. That includes natural disasters, such as flooding, and infrastructure failure, like a sewer pipe backing up and flooding your bathroom. Policyholders can add coverage for all damage (including mold damage) caused by failure of infrastructure, equipment, or pipes, but that doesn’t go for flooding. Flood insurance is usually bought separately and rarely includes any kind of robust mold damage insurance.
Why Do Standard Policies Exclude Mold Damage Insurance?
All insurance carriers, regardless of industry, want to avoid paying out more than you pay in insurance premiums. The standard coverage provided by insurance carriers follows three general rules:
- If it’s an expected or predictable event, it probably isn’t covered.
- If it’s catastrophic or affects multiple people or properties, it probably isn’t covered.
- If it’s unexpected and not catastrophic, it probably is covered.
Unfortunately, the causes of mold and insurance claim criteria are difficult to reconcile. Mold is very common and can be caused by events that are expected, unexpected, and catastrophic. This leads to the lines between them blurring, complicating mold damage insurance, and making carriers less likely to offer it by default.
What Do I Do If I Submit a Mold Damage Insurance Claim?
First, you should decide if you even want to file a claim. Insurance claims often lead to higher premiums. And if the cost of repairs is only around the cost of your deductible, you’ll end up paying most of the bill yourself and then be charged extra for it for years afterward.
However, if you do file a claim, here are some tips to keep in mind:
- File as soon as you find mold: The longer you wait, the more likely it is the mold will spread and your carrier will argue it wasn’t caused by a covered peril.
- Stop the source of the mold: If possible, try to stop the cause of the mold. Turn off the water to stop water leaks, clean up any pooling water, and dehumidify the space.
- Document everything: The more documentation you have, the more likely it is that you’ll get insurance remediation for mold.
If your mold damage insurance claim is rejected or doesn’t pay out the amount it should have, you still have some options. One is contacting a public adjusting firm.
Get What You’re Owed With Claims XP
We don’t just teach you about mold and insurance claims. Over the past two decades, Claims XP has settled over 10K cases with our clients getting an average of 10x to 1000x the initial amount offered by their insurance carrier. And with locations all over the country, we’re here to help no matter where you are. Schedule your free evaluation and consultation today to see what we can do to help your mold insurance claim.
