Does Homeowners Insurance Cover Mold?
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If you are concerned about mold in your home, you undoubtedly understand the danger. According to Earthweb, more than 70% of U.S. homes have mold of some kind. Worse yet, at least 25% of the U.S. population carries the HLA-DR gene, a gene that makes them susceptible to mold-related health issues. If you're dealing with mold, you are probably wondering, "Does homeowners insurance cover mold?" Here, we'll answer that question as well as dive into how standard homeowners insurance deals with mold claims.
Insurance carriers are very clear about whether homeowners insurance covers mold damage and removal. Some policies do not cover mold at all. Say you're located in an area that regularly floods or live near the ocean. Mold from water damage or humidity is such a predictable occurrence that insurers don't want to pay for its removal.
When an insurance company does cover mold, it is only under certain conditions. In a nutshell, it all comes down to what caused the mold and whether the thing that led to mold is covered under your policy.
Let's say your house caught on fire and the fire department sprayed tons of water putting it out. However, because the property remained damp after the fire department left, there is mold in the basement and main house. Does homeowners insurance cover mold? In this case, because fire damage is covered, so is mold resulting from the fire.
Here's a sample of situations in which mold is likely to be covered:
According to Hippo Insurance, mold is covered on a case-by-case basis. They call it "one of the more complex categories of your homeowners insurance policy." The tricky part is tracking down how the mold started and figuring out if the genesis of the mold is something that homeowners insurance would normally cover.
If the mold is due to a flood, you would need to have flood insurance in place for the mold to be covered.
It depends on your policy. If mold is excluded, no amount of fighting with the insurance company will change that fact. For companies that do provide mold coverage, many insurers limit mold claims to between $1,000 and $10,000. Given that widespread mold throughout the house could cost anywhere from $500 to $30,000 to remediate, you could find yourself out of pocket, even with a policy that covers mold.
Even if you learn that your insurance policy covers mold damage, there are situations under which they will not pay out. Your insurance company will not cover a claim if it is determined that it's a result of neglect. For example:
Typically, renters insurance does not cover mold. For any company that does provide such coverage, it again depends on whether the mold was caused by an event covered by your renter's policy or if it is due to negligence. So if the roof of your rental home is weighed down by ice, and water begins to seep in as the ice melts, any resulting mold may be covered.
However, if the kitchen sink has been leaking for weeks and you did nothing to keep the area below the sink dry, it is unlikely growing mold would be covered by your policy for two reasons: The mold was not due to a covered peril and you could have mitigated the problem.
It's important to address mold insurance claims the moment you discover mold. Getting someone out to begin drying the property within the first 48 hours can help contain mold growth. If you don't receive an immediate response from your insurance company, stick with it. Be courteous, but firm. The longer you wait, the more time the mold has to grow.
Insurers have different methods for filing a claim. Some will take your claim by phone. Others will encourage you to fill out an online form. Follow your insurer's lead.
No matter how the insurer prefers a claim be made, keep accurate and detailed records of everyone you speak with at the insurance company, including date, time, and what they told you.
How successful you are in getting the insurance company to cover mold depends on the coverage you've paid for. As you wait to hear back from the insurer, take a look at your homeowners insurance policy. If you don't have one, ask your insurance company to email you a copy. Check the "declarations page" for the following information:
If your homeowners policy specifically excludes coverage for mold, there is nothing more that can be done and you'll need to begin remediation on your own. If it provides coverage in certain circumstances and your situation fits, you're in luck. It may take some effort on your part but taking the following steps will get the ball rolling:
Do not exaggerate the damage or loss. Doing so can give the insurer the right to reject the mold claim.
If your claim is denied because your homeowners policy excludes mold damage or because the mold was caused by something other than a covered event, there's not much you can do but call a contractor who deals with mold and make repairs on your own dime. If you do have coverage but the insurance company continues to deny your claim, you have options. They include:
If the insurer does not reverse its decision, you can contact your State Department of Insurance to file a complaint. Keep in mind, the State Department of Insurance can only help if your policy specifically includes mold coverage.
While not every homeowners insurance company covers mold, here are a few that will:
As with most companies that cover mold, Lemonade will take care of mold caused by a covered loss, like ice, frozen pipes, fire, or lightning. In addition, the mold must be hidden away -- in walls, beneath floors, or in ceilings -- for it to be covered. In other words, Lemonade requires the mold to be somewhere you would not normally notice by just walking by.
While American Family will not cover damage that occurs over time, they do provide coverage for mold caused by sudden and accidental events.
Nationwide emphasizes that mold must be a result of a covered peril. A Nationwide policy may also cap the amount it will pay toward mold remediation.
If mold coverage is important to you, the first thing you should do is read through your current home insurance policy to learn if you already have it. If not, find out if your company offers a mold rider, an endorsement you can buy that adds mold coverage to your standard homeowners insurance policy.
Just as you can purchase a home insurance rider for water damage, some companies allow you to purchase a mold rider.
If not, it's time to shop around for an insurance company that does offer the coverage you seek, even if it means adding a rider to your policy. Keep in mind, mold damage riders are not available in every state. The cost of a mold rider can run anywhere from $500 to $1,500 annually, depending on where you live and the value of your home. According to House Logic, prices tend to be higher in humid Southern states, and in Texas and California.
If you discover mold in your home you need to take action before it spreads.
Step 1: Check your homeowners policy to learn if mold is covered
Step 2: If not, call a professional mold remediation company to remove the mold
Step 3: If you can't afford a professional company, a home remedy may help. Before you begin, put a mask on to prevent breathing in mold spores, cover your clothes from head to toe, and wear gloves. One common home remedy includes baking soda and vinegar. Here's how it works:
A home remedy may work for a small area of mold, like in a shower stall, but bigger jobs will almost certainly require the help of a professional crew.
Ideally, you will be able to prevent mold from occurring in the first place. Here are steps offered by the CDC to keep your home mold free:
Whether homeowners insurance covers it or not, the best way to treat and remove mold is to leave the task to professionals. If you're on the hook to pay for the job, look into applying for a credit card with a 0% introductory offer or a low-interest personal loan. And because mold can lead to serious health problems, consider the pros and cons of a home equity loan to come up with the funds to make your home safe.
So, does home insurance cover mold? The answer is complicated. It depends on the specific insurance company and the precise wording of your policy.
Only if you can afford to have the mold removed before you move into the home. A thorough mold inspection will give you a sense of how widespread the problem is and the estimated cost to remediate the problem. In some areas, mold is common, so if you decide to buy a home prone to mold, make sure you have adequate homeowners insurance coverage to cover any mold issues that may arise in the future.
The cost depends on the amount of mold that must be removed. Widespread mold throughout a home can cost up to $30,000 to remediate.
It can be as inexpensive as buying a box of baking soda and a bottle of vinegar or cost as much as a new car. It all depends on the amount of mold you're dealing with.
Mold can make you and your family ill, especially if you carry the HLA-DR gene. If there is mold in your home, check first to learn if removing it is covered by your homeowners or renter's insurance policy. If it is, file a claim. If not, check into mold remediation services.
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