Analyzing the fine print of your homeowners insurance policy is not anybody’s definition of a great read, but for homeowners facing a troublesome mold problem, it’s a must read.
Especially, this section: Does Your Homeowners Insurance Cover Mold?
In most cases, the disheartening answer is no. With a few important exceptions, most home insurance policies cover mold only if it’s the result of a covered peril.
“Mold has been a very contentious topic in the home insurance industry for decades,” Forbes.com’s Ashley Kilroy writes. “Between the late 1990s and early 2000s, the insurance industry altered the wording of home insurance policies to limit mold coverage after a spike in mold damage claims in conjunction with homeowners insurance water damage claims.”
And to confirm whether a specific home mold problem would be covered, we have to dive deep into the fine print of the standard homeowners policy coverage.
“Whether mold damage is covered by your homeowners insurance policy largely depends on the cause of the mold,” Nerd Wallet’s Ciarra Jones writes.
Covered Peril is defined as an event or circumstance covered in your homeowners insurance policy, like accidental water damage. If your washing machine leaks and black mold develops on the floor under it, a homeowners policy will likely cover it. Still, insurance will likely not pay to replace the washing machine, only the resulting water and mold damage.
When is Mold Covered by Homeowners Insurance?
- When it’s caused by a covered problem like a burst or frozen pipe
- A broke water heater or appliance
- Water damaged caused by extinguishing a fire
- An overflowing toilet
But as we are learning, there are many insurance policy disclaimers when it comes to covering mold. Many insurance companies will put a cap on the amount they will be pay for mold removal. Amounts vary per policy but average $1,000 to $10,000 per occurrence.
“Mold removal coverage is usually limited, meaning it will cover up to a certain dollar amount,” U.S. News & World Report’s Mandy Sleight writes. “… You may be able to increase the amount of mold protection coverage through your carrier with a policy rider for an additional cost.”
And, unfortunately, the list of non-covered mold issues is a deep read.
“Most homeowners insurance policies have a long list of exclusions of damage caused by mold,” Kilroy stresses.
When is Mold Not Covered by Homeowners Insurance?
The key definer here is mold caused by neglect or a lack of regular upkeep. This list includes mold damage caused by:
- Improperly sealed doors or windows
- An unaddressed leaky faucet
- Poor ventilation in a most room (example: a bathroom)
Standard non-covered mold issues include:
- Sump pump failure and water backup damage
- Flood damage
We understand that leafing through Merriam-Webster’s New American Dictionary from A to Z or Iowa Zoning Laws may be more compelling reads than studying your homeowners insurance policy to see when it will cover mold damage. But it’s absolutely must reading for homeowners.
“It’s essential to read your policy thoroughly to understand the extent of your coverage, as well as what you’ll need to do should you have to file a claim,” Jones writes.