If I asked you to tell me if your current insurance policy covered mold losses would you know the answer? Most of you might not be sure. And you wouldn’t be alone because the answer depends on your carrier and the wording of their contract as well as the circumstances on how the mold developed.
In the past insurance carriers saw an enormous increase in the number of mold related claims. If the policy proved all-risk or open-perils coverage, naturally occurring mold was excluded. However, mold because of a water claim was not excluded.
The awareness of mold as a health hazard drew more national attention, the number of mold claims grew exponentially as well as litigation. That is when the insurance industry began to exclude or limit mold coverage.
Some carriers have opted for a flat-out exclusion of mold, only to allow an endorsement for mold coverage. You are essentially buying back the coverage, but it will have a sub-limit such as $5,000, $10,000 or $20,000. Therefore, understanding what endorsements are available to you are important. Estimates for mold remediation can average $15,000 to $30,000.
If your policy does provide for mold coverage it might only apply if it were related to a covered loss and the resulting mold is considered an ensuing loss. This might be a pipe bursting or sewer backup if you elected to purchase that coverage. In this case the reason for the claim is the pipe burst and not the mold itself.
What is an example of when a mold claim is declined? Mold caused by poor home maintenance. Things like long term exposure to humidity, repeated water leaks or leaks the go unseen within walls or windows. Especially if you knew of the leak and did nothing to secure or correct it.
Usually these exclusions, limits or buy-backs are written as endorsements so check the endorsements on your declaration page where they are sometimes clearly listed as a mold exclusion. Ask your agent for a copy of that endorsement if you are having a hard time locating it in the policy.
To learn more about mold coverage, please feel free to give us a call at 513-444-2100 or email us at cberry@berry-agency.com. We can review your current policy and compare that to the policies we provide.
