Does Homeowners Insurance Cover Mold Damage?

If you have significant mold damage that requires professional mold remediation it needs to be paid for so the obvious question is: Does homeowners insurance cover mold?

There is no simple answer as several factors come into play. First is your insurance policy itself. You will need to read your entire policy and speak to your insurance agent if in doubt.

Some policies have excluded or capped coverage due to high profile lawsuits in several states, notably Florida, Texas, California and Arizona. Others put a cap on repairs or limit what is covered.

Generally, if the mold was caused by condensation, leaky pipes, poor drainage or other maintenance related issues the answer is no you wont have mold insurance coverage. Really you can’t blame insurance companies for not wanting to pay for someone’s negligence.

If the mold damage was caused by a burst pipe, sump pump failure or backed up sewer your policy will likely cover mold, but there may be a cap on how much will be paid. Insurance companies can and do change exclusions and what is considered a covered loss. This is why it is so important to read and understand your homeowners insurance policy.

If your policy does not cover mold or is not adequate to pay the full cost of mold remediation you may be able to obtain a rider to cover it. The cost will vary, being higher in those high profile states and in areas with high humidity.

If your mold damage was caused by a natural disaster like flooding your homeowners insurance wont cover mold damage but chances are the federal government will.

Does Homeowners Insurance Cover Mold?If you live in an area prone to flooding you probably are covered by the National Flood insurance Program  and that will cover mold and water damage.  For flooding in other areas, where a natural disaster occurred, like this year in Illinois, you can file a claim under the Federal Emergency Management Act with FEMA

In all cases take the time to document the damage with photos and keep a record of all calls and agents you spoke to. It’s a good idea to double check any information your insurance agent gave you with the insurance company itself. It can make the difference between a claim getting paid or denied.

If you are thinking about purchasing a home, particularly one that has been lived in, you will want to make sure you have mold damage insurance. Mold remediation can cost many thousands of dollars and although prices vary throughout the country a $20,000 mold removal bill would not be unusual.

Make sure you ask if any home you are thinking about purchasing has had any mold problems. But be aware that some homeowners will withhold or lie about mold problems because they know a house with mold in it is virtually unsellable and impossible to insure for mold damage.

Even if you currently own a home with no mold problems it’s a good idea to be familiar with your insurance policy and purchase a rider if coverage is not adequate.

Remember too that prevention is still the best cure. Keep the humidity in your home low, use dehumidifiers if need be and correct any condensation or drainage problems. Fix all faucet and roof leaks quickly and you wont have to ask: Does homeowners insurance cover mold?

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