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Louisiana stifles insurance payouts for mold damage

Louisiana has granted insurers the right to restrict coverage for mold from home and business insurance policies.

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Acting Commissioner of Insurance Robert J. Wooley says his decision came in the wake of high-profile toxic mold cases in Texas. Ever since June 2001, when a jury awarded a Texas family $32 million in a highly publicized toxic mold lawsuit against Farmers Insurance Group, the Texas home insurance market has been in upheaval. Louisiana wanted to avoid the same fate.

Home and business insurance policies in Louisiana provide coverage for damage due to the "sudden and accidental" discharge of water, but the new exclusion makes clear that insurers do not have to pay for mold claims that arise from slow leaks associated with home-maintenance problems. Additionally, insurers do not have to pay for mold testing and/or remediation.

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