Mold isn’t something we generally plan for when we buy a home, but unfortunately it can be a part of our lives at some point or another.
But one of the questions we are asked a lot is: “is mold covered by our home insurance?”
The answer isn’t a simple yes or no. Unfortunately, a lot of the damage mold causes is NOT covered by your regular home owners insurance; but it all depends on the type of policy you have, and the cause of the mold.
Cause of mold
If the mold has been caused by a sudden incident or accident, like a burst pipe in the bathroom; generally the cost of mold remediation will be covered in your insurance policy because the damage wasn’t caused by the mold itself, but rather the pipe busting.
On the other hand, if your home suffers from a flooding incident that is left untreated, and months or years later you have a mold infestation in the area that was flooded – your insurance policy will not cover the mold. The same goes for mold that is caused from repeated water leaks or humidity.
Flood damage is not generally covered in ordinary policies, but flood insurance is often available as an optional extra.
Value of coverage
If your insurance policy does include mold remediation, there may be a particular limit to the amount that is covered. This amount depends on the insurance company and the type of damage. According to the Insurance Information Institute, based in New York, around 22% of insurance claims come from water damage, which includes mold remediation. The average claim is anywhere from $15,000 to $30,000; though many policies only cover $1,000 to $10,000.
Optional extras, including flood insurance, can cost you an extra $500 to $1,500 per annum for low risk, and up to $25,000 per annum for high risk.
You need to decide if the risk is worth the price.
Does my policy include mold?
The best way to find out if your policy includes mold is to ask; or if you have time to spare, read through the policy and all its endorsements (something you should probably do anyway).
Keep an eye out for companies that have included clauses that allow them to limit the amount of coverage they have for mold claims, such as the exclusion of coverage for mold-related damage except that which is caused from a covered fire; offering buy-back endorsements which allow for minimal mold coverage for an extra fee; or placing restrictions on the type of homes they will insure (for example, some insurance companies will refuse to insure homes that have previously had water damage or that are built from particular types of materials).
If you want or need mold remediation but you are not sure if it’s covered by your current insurance policy, the best tip we have is to ring them and ask. Then call professional mold testers for a quote.
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