Being a homeowner comes hand in hand with a number of exciting benefits such as a feeling of pride, something to pass down to the kids, and the confidence that comes with having a reasonably “safe” long-term investment.
But as exciting as being a new homeowner can be, it can also be as confusing – especially when it comes to insurance. One question (out of a pool of many questions new homeowners ask) often voiced by new homeowners is this: is mold covered by insurance?
Mold. Black, white, green, blue – it doesn’t matter. The name alone is enough to strike fear into the hearts of many who hear the seemingly innocent word. And rightfully so because as harmless as it may seem, this unsightly formation is a hassle and a half in the world of homeowners insurance plans.
Today, I’ll be highlighting the ever-precarious relationship between mold and home insurance. Is it covered by insurance? If so, by which companies, and how can you increase the chances of your claim being accepted? If not, what can you do to make sure your home remains a mold-free zone?
You’re about to discover the answers to all of those questions and more. Keep reading to make sure you never find yourself on the receiving end of a rejected insurance claim. You can thank us later.
Does Homeowners Insurance Cover Mold?
There is simply no point in beating around the bush. I’m here to answer one question and one question only: does insurance cover mold? The short answer is maybe, sorta, kinda, or sometimes. Ultimately, it depends on the source of the mold.
Let’s go back to basics to understand why this is the case, before dealing with the nitty gritty of the topic.
Mold, as you probably know, loves moisture. In order for mold to grow and thrive, moisture must be present. From a home insurance company’s point of view, mold comes from one of two places: accidents or negligence. Mold that forms as a result of a burst pipe is an example of accidental mold growth, while mold that has formed as a result of prolonged exposure to humidity counts as negligence.
So, how do you know when mold is caused by accident or negligence? And how can you go about making a claim? Which companies cover mold claims? What can you do to up the odds in your favor when it comes to submitting an insurance claim? Let’s find out.
When Is Mold Covered By Insurance?
Mold is covered by insurance in a handful of instances. While, of course, the specifics of your claim and the likelihood of it getting approved or denied are dependant on your homeowners insurance plan and the insurance company in question, here are some instances of covered peril:
- Water damage sustained as a result of fire extinguishers being used to extinguish a fire in your home
- Water damage that has been caused by a burst hot water heater
- Water damage caused by leaking and malfunctioning appliances
- Mold that is caused as a direct result of acts of nature such as ice storms or hurricanes (but not floods as that requires specific flood cover)
When Is Mold Not Covered By Insurance?
In all honesty, more often than not, mold is NOT covered by insurance. Again, this may vary according to your policy wording and the insurer in question, but mold is typically not covered in instances where:
- The mold has been caused due to improper or irregular home maintenance
- The mold has been caused by typical wear and tear
- The mold has been caused by moisture or water from construction
- The mold has been caused by shoddy repair jobs performed by unapproved companies
How Do I Make An Insurance Claim For Mold?
The very first thing you need to do is find out whether or not your insurance plan covers mold and, if so, to what extent. From there, you can go about making the necessary claim or set about organizing an out-of-pocket mold removal.
If your insurance company covers mold – even partially under the umbrella of covered peril – you need to make a claim as quickly as you can. The reason for this is that mold tends to spread quickly, and the sooner you file your claim, the less time it has to cause damage.
The first thing you need to do is take photographs of the mold in order to back up your claim. Once you’ve snapped your shots, you need to locate the leak and stop it as best as you can so limited further damage is done.
Now, clean up the water and remove any water-attracting materials such as insulation or rugs before calling your insurance company to report the issue. It’s important you keep any materials that have been damaged as proof in case your insurance adjuster needs to see it to process your claim.
How Can I Increase The Chances Of My Claim Being Accepted?
Even if your insurance company DOES cover mold, there’s a chance your claim may be rejected. This is due to the sensitive – not to mention case-dependent – nature of mold claims.
If your claim is not approvable, no tips will help it to be approved; however here are a few tips that can strengthen already decent claim cases:
- Call your insurance agent the moment you’re made aware of the mold and keep a log of the call with detailed notes as to what steps must be taken – then follow those instructions to the T.
- Take as many photos and videos as possible and submit all of this evidence along with your claim. Rather send too much supporting evidence than too little.
- Familiarize yourself with your policy to be aware of what your coverage applies to and what is excluded – this gives you an accurate idea as to whether or not your claim will be accepted.
- If you have any up-to-date maintenance records, then provide them too – this could be anything from a plumber’s invoice to the receipt for gutter cleaning products
- Use a mold removal company that is approved by your insurance provider to clean up the damage rather than doing it yourself or contracting a non-approved company. This way, the insurance company will know you went out of your way to ensure no further damage was sustained.
- Remove any water-attracting materials such as padding, carpet, rugs, or upholstery within 48 hours of the event taking place.
No matter what, know you may need to put up a bit of a fight to have your claim processed. However, in the event your claim is denied, you can appeal.
A good starting point is to hire a licensed contractor to provide a second opinion and then follow your insurance provider’s appeal process from there. Contacting your state’s insurance commissioner is also a good idea.
What Insurance Companies Cover Mold?
As pressing as the question “does homeowners insurance cover black mold?” is, sometimes asking which insurance companies even consider covering mold is much more pressing. There are many insurance companies, such as State Farm, that do not cover mold in any way, shape, or form.
And then there are insurance companies such as Allstate that cover mold, but they have a $5,000 coverage limit, and Chubb that covers “mold remediation expenses.” There are also insurance companies that are able to offer mold-damage riders that are added on to plans.
As much as I wish I could give you a clear answer as to whether or not mold is covered by insurance, I can’t. Sadly, unlike mold itself that can be black or white, the general relationship between mold and insurance is a gray area. It all depends on the circumstances that led up to the mold forming and, ultimately, being claimed for.
To be on the safe side, we recommend going out of your way to ensure that mold doesn’t form by taking the following steps:
- Keep your indoor humidity level at bay by installing dehumidifiers, exhaust fans, and air conditioners.
- Frequently inspect the hoses and fittings on hot water heaters, appliances, sinks, and toilets.
- Make sure mold-prone areas such as bathrooms, laundry rooms, and kitchens are properly ventilated.
This is a topic every homeowner needs to be familiar with and I strongly encourage you to review your insurance policy or chat to your broker to query the status of your mold coverage.
If you are not covered, I highly recommend you start shopping around for a mold-damage rider add-on to your plan.