Does Home Insurance Cover Mold?
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Mold can be an unsightly health hazard that’s expensive to resolve. The typical cost for mold removal ranges from $1,108 to $3,392, according to HomeAdvisor, but it can be much higher for larger projects.
Unfortunately, home insurance doesn’t always cover mold damage or mold removal. Mold is covered under homeowners insurance on a case-by-case basis, depending on what causes the mold and how harmful the mold is.
Here’s what you need to know about home insurance and mold:
Does home insurance cover mold?
Homeowners insurance may cover mold if the mold is caused by an accident, incident, or peril (damaging event) that’s included in your dwelling coverage. Events that could be covered under a standard policy, include:
- Mold caused by broken pipes
- Mold caused by broken appliances
- Mold caused by a broken water heater
- Mold caused by water damage from putting out a fire
Whether or not you need to file a claim for mold removal depends on its severity. In some cases, removing mold can be a DIY job. If you forget to ventilate your bathroom a few times and mold grows on the surface of the shower tiles, cleaning up with bleach and properly ventilating the room moving forward could be enough to solve the issue.
But suppose mold grows in your ceiling, carpet, or walls after a pipe bursts or your washing machine leaks. In that case, the only way to rectify the situation may be to hire a professional. A full mold remediation service could include an inspection, disposal of materials with mold, and sanitization of the area. In this scenario, insurance could kick in to help pay for the repairs up to a covered limit.
Mold damage coverage limits
Insurance coverage limits for mold are typically around $5,000, according to Experian. So, even if your policy covers mold, it’s possible that the repair could exceed the coverage limit, and you’ll be responsible for paying some costs out of pocket.
Since policy terms can vary, check the fine print to determine your mold coverage limit. In some cases, insurance carriers may let you purchase additional mold coverage for an extra cost. Exploring your options can help make sure you’re covered if an accident happens.
When does home insurance not cover mold removal?
Mold removal isn’t covered by insurance when it’s caused by a peril that’s excluded from your insurance policy. Events where home insurance policies usually don’t cover mold damage include:
- Improper maintenance: If mold grows slowly over time due to you not making routine repairs, like fixing a leaky pipe or properly sealing around your windows, the claim for that damage would likely be denied.
- Owner neglect: If mold grows because the owner isn’t taking steps to reduce moisture, such as running the A/C or dehumidifier in the summer, the repair costs might not be covered. In moist, dark environments, mold can spread and damage items in its path. That’s why it’s essential to keep humidity in the home low, especially in humidity-prone areas like your bathroom or laundry room.
- Flooding: Homeowners insurance doesn’t cover flood damage or mold from a natural event, like a hurricane. For flood coverage, you must purchase flood insurance separately.
- Sump pump failure: Sump pump failures and water backups are usually not covered in a standard homeowners policy either, and mold that results from such a failure will likely not be covered.
- Faulty building materials: If a defect in your home or the materials that built the home caused the mold damage, mold removal might not be covered.
Find Out: How Much Homeowners Insurance Do I Need?
Other mold coverage options
Purchasing additional coverage could help protect your home and personal property from mold and other water damage. Here are some coverage options to consider:
- Sump pump and water backup coverage: Adding sump pump and water backup coverage to your policy could protect you from mold damage caused by a sump pump overflow.
- Mold riders and endorsements: Insurance providers may offer mold coverage endorsements that increase your protection from mold-related events.
- Flood insurance: Flood insurance may not be required but can still be worth purchasing for protection even if you don’t live on a floodplain. However, even flood coverage may have limited coverage for mold, so be sure to read the fine print. You can purchase a flood insurance policy through the National Flood Insurance Program or a private insurer.
How to file an insurance claim for mold
Filing a claim for mold is similar to filling any other homeowners insurance claim. While the process with each individual insurance provider can vary, you’ll want to take the following steps:
- Document the damage. Take photos of the mold to maintain a record of the damage.
- Make temporary fixes to stop additional mold growth. Insurance policies require that homeowners make temporary fixes to minimize future damage caused by covered events. This could include disabling your washing machine and setting up a dehumidifier to minimize mold growth after a leak.
- Contact your insurance provider. Call the provider’s number for filing claims or fill out a claims form online. When filling a claim, you may need to provide information, such as the date the covered event occurred, and take an inventory of the property damage.
- Schedule an inspection. The insurance provider may call you to discuss the claim and send out an adjuster to inspect the damage.
- Review the settlement. The insurance carrier will notify you of a settlement amount. If you’re not happy with the settlement offer or your claim is denied, you may be able to dispute it.
- Receive your payment. You’ll receive payment for the claim, which may go directly to the contractor who fixes the damage.
What to do if your mold claim is denied
The most straightforward reason a claim could get denied is if an excluded peril or your negligence caused the mold growth. If you believe a claim is wrongfully denied or the payout is less than expected, you have options.
First, you can dispute the results with your insurance carrier’s claims department. Explain why you disagree with the settlement or denial and provide proof to support your claim. If disputing the claim with the insurance carrier doesn’t work, you could escalate the dispute to your state’s insurance oversight office by filing a complaint. The government agency will reach out to the insurance provider and investigate the issue.
To avoid any unpleasant surprises when a disaster happens, it’s always a good idea to run through your insurance policies to understand the terms. If you find gaps in protection, you could reach out to your insurer about additional coverage or shop around to get quotes from other insurance providers. At Credible, you can quickly compare homeowners insurance quotes from many insurance carriers.
Disclaimer: All insurance-related services are offered through Young Alfred.