Florida Mold Insurance Coverage: More Limited Than You Might Think
Property damage caused by mold can be a real problem—especially here in Florida. Florida’s humid climate and often rainy weather create the perfect petri dish to grow toxic and damaging mold. Fortunately, most homeowner’s insurance policies cover the damage caused to your property by mold. Unfortunately, the coverage provided by most policies is extremely limited. Understanding the nuances of mold coverage in homeowners’ insurance policies is crucial for effectively managing risks and expenses associated with mold damage. Here’s a detailed look at the limitations and considerations surrounding mold coverage in homeowners’ insurance.
Up until a few years ago, damage caused by mold was covered under Coverage A of your homeowner’s insurance policy. Coverage A of your policy provides coverage to the main structure and sets forth a policy limit, which, in theory, is related to the replacement cost of your entire home. A few years ago, the insurance industry lobbied for and was allowed to alter their policies to include the following language:
Fungi, Wet or Dry Rot, Yeast or Bacteria
a. We will pay up to $10,000 for:
- The total of all loss payable under Section I – Property Coverages caused by “fungi”, wet or dry rot, yeast or bacteria;
- The cost to remove “fungi”, wet or dry rot, yeast, or bacteria from property covered under Section I – Property Coverages;
- The cost to tear out and replace any part of the building or other covered property as needed to gain access to the “fungi”, wet or dry rot, yeast or bacteria; and
- The cost of testing of air or property to confirm the absence, presence or level of “fungi”, wet or dry rot, yeast or bacteria; whether performed prior to, during or after removal, repair, restoration or replacement.
- The cost of such testing will be provided only to the extent that there is a reason to believe that there is the presence of “fungi,” wet or dry rot, yeast, or bacteria.
Now – what does all that mean? There are two kickers to this policy language. First, no matter how catastrophic your damage is or how high the cost to repair – your policy will only provide coverage for up to $10,000 for these repairs. Secondly, the insurance company can deduct from this limit the amount the insurance company spent initially investigating this loss! In other words, if mold caused $50,000 worth of damage to your home and, upon contacting the insurance company, the carrier spends $2,500 investigating the existence of the mold damage and calculating the amount of the loss, you would only be provided coverage for $7,500 to repair your home ($10,000 coverage minus $2,500 investigation expense incurred by carrier). You would then be on the hook for the remaining cost of repairing your property.
Understanding Mold Coverage in Homeowners Insurance Policies
Most standard homeowners insurance policies cover mold damage only if caused by a “covered peril.” A covered peril refers to an event your policy explicitly covers, such as a burst pipe, sudden appliance leak, or roof damage caused by a storm. However, your claim will likely be denied if mold develops due to neglect, poor maintenance, or long-term moisture issues.
When Mold is Typically Covered:
- Sudden and Accidental Water Damage: Mold remediation may be covered if it results from sudden and accidental water damage, such as a pipe bursting or an appliance malfunctioning.
- Storm-Related Damage: Mold caused by water damage after a storm may be covered if the storm itself is a covered peril in your policy.
When Mold is Typically Not Covered:
- Preventable or Gradual Damage: Mold resulting from long-term leaks, poor ventilation, or high humidity due to poor maintenance is generally not covered.
- Flood-Related Mold: Mold caused by flooding is usually not covered under standard homeowners insurance policies. For flood-related mold coverage, you would need a separate flood insurance policy.
Coverage Limits on Mold Remediation
Even if your homeowners’ insurance policy covers mold, many policies impose strict limits on the amount they will pay for mold remediation. While the initial water damage may be fully covered, the cost of removing mold, replacing damaged materials, and preventing future mold growth may be limited.
Common Mold Coverage Limits:
- Policy Cap on Mold Claims: Some policies limit mold coverage to a specific amount, such as $10,000 or less. Depending on the severity of the damage, this amount may not be enough to cover the full cost of remediation.
- Exclusions for Certain Types of Mold: Some policies exclude coverage for toxic molds, such as black mold, which can be more expensive and dangerous to remove.
It’s important to check your policy to understand whether mold remediation is covered and if there are any caps or exclusions that may apply.
Common Reasons Mold Insurance Claims Are Denied
Homeowners are often surprised that their mold insurance claim has been denied. Insurance companies may deny mold claims for several reasons, some of which can be avoided by taking preventive measures and understanding your policy.
Common Reasons for Denial:
- Failure to Maintain the Property: Mold that develops due to long-term leaks, poor maintenance, or neglect is typically not covered. For example, your claim may be denied if you ignored a small roof leak that eventually led to mold growth.
- Delayed Reporting: If you wait too long to report water damage or mold, the insurance company may argue that the damage worsened due to your delay and deny your claim.
- Gradual or Wear-and-Tear Damage: Mold caused by wear and tear, such as aging plumbing or faulty seals around windows, is typically excluded from coverage.
How to Avoid Denial:
- Act Quickly: If you experience water damage, address the issue immediately. Dry out the area to prevent mold growth, and immediately report the damage to your insurance company.
- Document Everything: Keep detailed records of maintenance and repairs. This can help you prove that you took proper steps to prevent mold and that any damage was sudden and accidental.
How to Protect Yourself from Mold Damage
Since mold coverage in homeowners insurance policies is often limited, it’s important to take preventive measures to protect your home from mold growth in the first place. Preventing mold can save you from costly repairs and reduce the risk of a denied insurance claim.
Mold Prevention Tips:
- Fix Leaks Immediately: Regularly inspect your home for leaks in the roof, plumbing, or windows, and address any water issues promptly.
- Ensure Proper Ventilation: Ensure your home is well-ventilated, especially in areas prone to moisture, such as bathrooms, kitchens, and basements.
- Use Dehumidifiers: In humid climates like Florida, using dehumidifiers in your home can help reduce moisture levels and prevent mold growth.
- Clean and Dry: Clean and dry the affected area quickly after water damage. Mold can begin to grow within 24 to 48 hours of exposure.
When to Contact a Lawyer for Mold Insurance Claims
If your insurance company denies your mold claim or provides an insufficient settlement, it may be time to consult a property insurance claim lawyer. At Williams Law, P.A., our experienced lawyers can help you understand your policy, challenge a denial, and ensure you receive the compensation you’re entitled to under your coverage.
How a Florida Insurance Claim Lawyer Can Help:
- Policy Review: A lawyer will review your homeowner’s insurance policy to determine whether the mold damage should be covered and identify any potential loopholes.
- Filing an Appeal: If your claim was denied, your lawyer can help you file an appeal and present additional evidence to support your case.
- Challenging Bad Faith Practices: If the insurance company acted in bad faith—such as unfairly denying your claim or delaying payment—your lawyer can pursue legal action to hold them accountable.
Conclusion: Be Aware of Mold Coverage Limitations
Mold can cause serious damage to your property and health, and dealing with an insurance company to get proper coverage can be frustrating. Understanding the limitations of your mold insurance coverage and taking proactive steps to maintain your property is crucial for preventing issues.
If you’re dealing with mold damage and unsure whether your homeowners’ insurance policy will cover the costs or your claim has been denied, contact Williams Law, P.A. for a free consultation. Our experienced team can help you navigate your policy and ensure your rights are protected.