Does Homeowner’s Insurance Cover Mold?

In 2014 I discovered that my entire home was highly contaminated with various types of mold and mycotoxins.  There was no visible mold. It was all hidden behind walls, under the carpet, and in the ceiling. The source was from a very complex and long term water intrusion that I was unaware of.

The first question I asked the toxicologist I was working with was “does homeowner’s insurance cover mold?” His face said it all. He told me to call them but to be prepared to be disappointed.

Insurance and mold is a bit complex. That’s because in the insurance world, mold is considered a byproduct of a water intrusion. This makes sense since almost all mold events begin with a water source.

Whether or not mold is covered by your insurance completely depends on whether or not the specific water intrusion is covered. See? I told you it was complex.

Grab a beverage of your choosing, a notepad, and let’s tackle the question of….

Does Homeowner’s Insurance Cover Mold?

We need to start with the basics. Let’s define the types of water intrusions to better understand what type of water damage is covered by homeowner’s insurance.

What is a flood?

A flood is generally considered to involve external water rising onto your land and into your home. Examples of these are water you might get from:

• An overflowing river, creek, or stream
• Hurricane
• Tsunami
• Mudslide
• Heavy rains
• A burst water line in the street that is City or County property

What is an act of nature?

Examples of an act of nature include:

• Hurricanes
• Tsunamis
• Tornados
• Earthquakes
• Hailstorms
• Ice Storms

What is water damage?

Water damage involves instances of water INSIDE your home that has not made it to the outside of your home. There are exceptions to this of course. The water damage can originate from inside your home in the form of a plumbing leak or it may come in from the outside via the roof, windows, or doors. There are a LOT of loopholes when it comes to water damage however.

Let’s dive deeper into water damage, the resulting mold, and insurance.

When Water Damage And Resulting Mold IS Covered By Insurance

If the water damage and resulting mold in your home was caused by something sudden or accidental you typically will have insurance coverage. These situations are considered covered perils. These covered perils vary from policy to policy but in general, the following scenarios are covered:

• An act of nature where the water intrusion is from damage to your home and not from flooding. This would include a tornado ripping off your roof and allowing rain into your home or a tree falling and breaking a window allowing water in.
• Damage from the weight of snow, ice, or sleet
• Backed up water from an ice dam that found its way into the walls, insulation, or ceilings of your home
• Your water heater bursts and floods your home
• Washing machine hose bursts (not slowly leaks)
• Dishwasher malfunctions and floods the kitchen
• You have a fire and use a hose to put it out
• Pipe freezes and bursts in your wall, ceiling, or under your foundation
• Plumbing connections or pipes fail, leak, or burst in your wall, ceiling, or under your foundation
• A faulty HVAC unit or component of your HVAC unit
• Toilet malfunction which dumps gallons of water onto your floor

This is by no means a complete list of when mold is covered by insurance. These are the more common situations.

In these instances, mold would be “resulting damage” from a covered peril. It’s important to distinguish between resulting damage and initial damage. For example, if your water heater breaks and a leak causes mold to form in the walls, then your policy might pay for the walls to be repaired and the mold to be removed but not for the replacement of the hot water heater.

It is also important to note that water damage and mold that results from a burst pipe, other pipe issue, toilet issue, faulty appliance, etc… is only considered a sudden event if caught quickly. (It also means that around 40 gallons or more of water were released.) Quickly is loosely defined but generally considered to be within 72 hours. If you are on a three week vacation and your water heater fails, your insurance may deny the claim as it no longer sees it as a sudden event. This is why it is a good idea to turn off your main water supply when you are away for an extended period.

When Water Damage And Mold IS NOT Covered By Insurance

Damage caused by flooding is generally not covered by your home insurance policy. You need separate flood insurance coverage. Remember, because the distinction between flooding and water damage is so fine, it’s always best to talk with your insurer after any incident. Even if your claim is flood-based and the immediate damage isn’t covered, perils extending from the flood might be.

A sewer backup is not typically covered by the typical homeowner’s insurance policy. A sewer backup is where water gets backed up from a drainage system or sewer, goes through the pipes, and does damage to your home. What causes sewer backups? Tree roots, combined pipelines which are systems that mix raw sewage and storm water, and a blockage in a sanitary main can all be causes. A sewer rider is additional coverage for these instances and is something I suggest looking into.

If the mold grew because of homeowner negligence, neglected home maintenance, repeated water leaks, long-term leaking, slow seepage or long-term exposure to humidity, your home insurance generally won’t cover the damage. Some examples of when water damage and mold are not covered by insurance include:

• A shower head or faucet that has leaked for months which allowed mold to grow
• If your windows are not properly sealed and rain is able to get in again and again leading to mold
• The seal around the toilet fails allowing water to seep into the subfloor, baseboards, and walls
• Exterior pipe freezes and bursts because it was not properly insulated against weather
• Improper ventilation in the bathroom, laundry or kitchen led to mold growth on the walls
• You live in a humid climate and failed to use a dehumidifier, and mold grew as a result
• Your roof hasn’t been repaired or replaced in 40 years and allows water to come into your attic and walls
• You do not have a working sump pump in your basement

How Do I Know If My Current Insurance Policy Covers Mold or Water Damage?

It’s as simple as checking your homeowners insurance policy to see if there is any language about mold claims. Look for the words mold, water, and fungus. If you don’t see any language relating to mold, call them and ask!

Some insurance companies, like State Farm, have dropped coverage for mold altogether, even if it’s a result of storm damage. However, there are still some large national insurance companies that provide coverage for mold. For instance, Allstate provides mold coverage, but it imposes a $5,000 coverage limit on claims. It’s good to know what your specific policy does cover in the event of water damage or mold.

It is also a good idea to read your policy every year when it renews. It is not uncommon for insurer’s to change water damage or mold coverage.

Is There A Way To Get Mold Coverage On My Insurance Policy?

If you don’t have mold coverage, you can buy an endorsement or rider to your insurance policy that adds mold coverage. An endorsement or rider is when an insurance company adds additional coverage to a regular home insurance policy, for an additional fee.

Most insurance companies refer to mold coverage as “limited fungi or microbes coverage” or a “mold damage rider.”

Mold endorsements will cost you more in humid areas and in older homes made with materials more prone to mold. Like I mentioned above, not all insurance companies will cover mold.

Some home policies only provide a very limited amount of coverage for mold claims.  This can be by capping the amount the insurer will pay, for example at $5,000, or stating that the insurer will only pay for certain services, such as clean-up, and excluding others, such as mold testing and remediation.

If your home has had a mold related claim before, your insurance company will likely decline a mold endorsement or charge you a lot for that coverage. The same goes for homes deemed “risky” or prone to mold. This includes older home with original wiring or plumbing or homes in flood prone areas. (Flood insurance is different than mold coverage).

How Do I File A Mold Damage Insurance Claim?

Before filing a claim, if possible, stop the leak or turn off the main water line into your home if the leak is plumbing or appliance related. Open windows and run fans / dehumidifiers to begin drying out the water if at all possible. Do not move anything at this point. You may take photographs to document the immediate issue and resulting damage.

Call your insurance company to get the claim’s process started and find out what they suggest as the next steps. Do not use the word “mold.” Stick to discussing the water damage. Mold is a red flag you don’t want on your claim.

The normal process and timeline for a water and mold damage claim is as follows:

• Depending on the cause of the water intrusion, the insurance company may immediately authorize a restoration or remediation company to come out to contain and dry the area out.
• If the water damage is a result of a plumbing issue, they will instruct you to immediately contact a plumber to get that repaired. This is normally at the expense of the homeowner and may need to be completed before a remediation company can be brought in. Plumbing issues are covered under a home warranty if you have one.
• An insurance adjuster will contact you to come out, usually within 48 hours of the claim process being initiated. He or she will take photos, measurements, etc… to determine the extent of the damage and the cost to make repairs and replacements.
• The insurance company may continue to seek the services of the remediation company depending on the report from the adjuster.

Once your claim is approved and paid, it is the homeowner’s responsibility to have the actual repairs made to their home as well as to replace any personal belongings that were damaged or destroyed. In addition, if the water damage was the result of an appliance failure, it is the homeowner’s responsibility to get that appliance repaired or to replace it. The appliance itself may or may not be covered in the claim.

Insurance Companies Will Almost Always Try To Deny Claims Where Mold Is Involved

When you look at the list of water events that insurance companies will cover, these are all occurrences that happen suddenly, that people generally agree could not be prevented. There is a clear cause-and-effect relationship between the peril and the damages it may have caused.

Mold doesn’t act like this. It is never a sudden event although it can grow within 48 hours under the right conditions. Normally, no one is suddenly struck by mold, even if there’s no way you could have known about it. Mold growth is gradual, so it’s considered “difficult” to prove the exact cause, or when the issue began. This is the defense insurance companies will use to deny a claim. To them mold growth = a long-term water issue. I could share my thoughts on this but I won’t.

What to Do If Your Mold Claim Is Denied

If your homeowner’s insurance company denies your mold claim, you may want to get a licensed contractor to offer a second opinion on what caused the damage. You could also attempt to appeal the denial with your insurance company if it has a specified appeals process. If not, your state insurance commissioner may be able to offer help on what you can do to get the claim approved or to file a complaint about denial.

How to Avoid Having a Mold Damage Claim Denied

There are several things you can do to improve the chances of having your water damage or mold claim approved.

• Keep detailed home maintenance records (with before and after photos) and receipts
• Install humidity meters and run dehumidifiers if you live in an area with high humidity
• Adequately ventilate bathrooms, laundry rooms and kitchens
• Keep rain gutters clean
• Regularly have your roof inspected and make repairs immediately
• Have your HVAC unit serviced yearly
• Maintain all appliances as suggested by the manufacture and keep records of any repairs and warranty coverage

Remember, proper mold prevention is key! Check out these 27 tips to prevent mold and be sure to read through the leak prevention page as well. There are a lot of simple things you can do to keep your home safe from water damage and mold!