Home insurance provides coverage for mold damage; however, it does not cover every instance of mold damage. This is also true for condominium owner and dwelling fire policies. Coverage depends on the cause of loss and circumstances that resulted in the mold.  When coverage does apply, standard home policies typically provide coverage, under the Limited Fungi, Wet or Dry Rot, or Bacteria Coverage endorsement (see sample), of up to $10,000 for property damage and $50,000 for liability, if someone other than a household member becomes sick because of the mold. However, the challenge is that mold can grow in places where you can’t immediately identify it, which can quickly cause the cost of remediation and repairs to exceed the basic limits. We recommend purchasing expanded coverage of up to $50,000 for property damage and $100,000 for liability, which is generally available from most carriers if you are eligible.

The problem

Mold can grow wherever moisture is present.  Outdoors it is typically not a problem, but mold growing in a home can create major health problems and damage to your residence and possessions unless remediated promptly and properly. You can usually see or smell a mold problem. Most molds produce musty odors, which are often the first sign that you have an issue. Mold often appears as discolored, sometimes fuzzy, or slimy patches that increase in size as they grow. If mold is growing in your home, the key is to treat the problem and fix the cause immediately before the infestation becomes worse or causes permanent damage.

When home insurance covers mold damage

Coverage for mold damage depends on the source of the mold. If mold is caused by a “covered peril”, i.e. a loss situation covered by your policy, then your insurance should typically cover the damage.  Accidental water damage is a typical cause.

Situation examples of when resulting mold damage may be covered

• Washer or dishwasher malfunctions causing a leak

• Water heater leak or burst

• Frozen or burst pipe

• Water damage caused by extinguishing a fire.

When home insurance does not cover mold damage

Generally, mold damage caused by neglect, or a lack of regular upkeep and maintenance isn’t covered by home insurance. If your insurance company deems that your mold damage was preventable, then you will be responsible for paying to make repairs.

Situation examples of when resulting mold damage may not be covered

• Improperly maintained sealing around the base of a toilet or shower
• Poorly sealed doors or windows.
• Poor ventilation in a humid room such as a bathroom or kitchen
• Poor ventilation of attic
• Leaky faucet or pipe that was not promptly fixed
• Poorly maintained or broken gutters
• Flooding, which is generally excluded by home insurance and requires separate flood insurance; however, even flood insurance has limitations and may not cover mold damage

Preventing mold growth in your home

While insurance can help protect you financially from situations that are beyond your control, the key is to stop mold before it starts. To prevent mold, you need to manage moisture in the areas of your home that tend to be most prone to excess humidity, condensation, or water. Here are a few tips:

• Clean up water leaks and spills within a day or two of occurring
• Clean and repair roof gutters regularly
• Direct rainwater away from your home.
• Inspect pipes, faucets, and hoses regularly and fix leaks immediately
• Install and use exhaust fans, or open windows to improve bathroom and kitchen ventilation
• Vent clothes dryers, stoves, and exhaust fans to the outside, when possible
• Ensure air conditioning drip pans are clean and drain lines are flowing properly
• Avoid using carpet in areas such as bathrooms and basements
• Use dehumidifiers and air conditioners to reduce humidity; try to keep humidity below 60%.

If you have concerns about how you are protected in case of fungi, wet or dry rot, or bacteria damage, please review your policy carefully and/or call us to review the details.