So You Have Mold! Will Your Home Insurance Cover You?

Mold can be a very expensive problem to treat. The cost varies depending on the extent of the mold damage as well as the location. According to The Old House, mold in an attic typically costs around $1,000 to $9,000 to resolve, while a moldy HVAC system could cost anywhere from $3,000 to $10,000 to resolve. If the entire house is moldy, remediating the issue could come at a cost of $10,000 to $30,000 on average. 

Most people don't have this kind of money in their checking account. As a result, homeowners with a mold problem may wonder if their homeowners insurance will cover their expenses. Here's what homeowners need to know. 

When does home insurance cover mold? 

Home insurance will not pay for mold remediation in the vast majority of circumstances. That's because insurance is intended to provide coverage against unexpected disasters or events outside of a homeowner's control, not to cover against any possible problem with the house -- especially those caused by neglecting maintenance or repair issues. 

In many cases, mold develops over time because of a homeowner not addressing a problem. For example, a leaky sink or a door or window that is not properly sealed could result in the type of moisture build-up that leads to mold growth. Home insurance definitely would not pay in these situations, since homeowners don't just get to defer maintenance on their property and ask insurers to pick up the bill. 

Sadly, sometimes homeowners may not know that a window has gaps or a sink or shower has a slow leak. Even in these circumstances, home insurance typically will not provide any coverage if mold happens as a result, since policies generally wouldn't consider this undisclosed problem to be a covered cause. 

Homeowners insurance could potentially cover mold only if it happened as a result of a problem the policy does pay for. For example, if firefighters use a hose to put out a fire that the policy covers and mold occurs because of that water, then the insurer might cover remediation of the mold in that particular instance. 

But, unless there's an immediate and direct link between the covered cause of the mold and the development of the mold, homeowners should assume their insurer will do nothing to offer financial support when mold strikes.

Be sure to understand the limits of homeowners insurance 

Mold is just one of many things home insurance won't cover. A homeowners insurance policy also generally will not pay for:

• Pest damage
• Floods
• Wildfires in fire prone areas
• Earthquakes
• Rust
• General wear and tear  

To find out exactly what a home insurance policy does and does not cover, look at the policy document. If it's a "named-peril" policy, it covers only the disasters listed. If it's an open peril policy, it will cover anything that isn't excluded so check the list of exclusions to find out what the insurer won't pay for. 

Homeowners should also save for problems that could come up that insurance isn't designed to provide protection against. Having a home repair emergency fund could make it possible to pay for mold remediation, old appliances that fail, or the many other things that home insurance simply won't pay to fix. As a homeowner, it's a good idea to put money aside in a savings account to pay for these problems as they arise.