Most homeowners don’t think about mold until it’s already become a problem. And then you may be surprised what is and isn’t covered by your homeowners insurance.

Lloyd Crosthwait, an engineer at Continental Machinery Company in Dallas, a disaster-recovery firm, has seen mold growing in many of his clients’ homes.

Mold spores are everywhere in nature so that challenge is always there. I’ve seen problems where people have mold growing in closets just because they’re living near a coastline or other humid areas,” said Crosthwait.

Exposure to molds can cause symptoms such as nasal stuffiness, eye irritation or wheezing. And some people may have more severe reactions. Mycotoxins from mold growth can also cause other respiratory problems, according to the Occupational Safety and Health Administration.  

Key Takeaways

  • Some home insurance policies cover mold that is caused by a covered peril.
  • Insurance policies will not cover mold that is the result of a maintenance issue. For example, if there is mold due to pipe leak or humid climate.
  • If you find mold in your home, the best thing to do is to call a company that does specializes in removing mold.
  • Mold removal can be expensive, so the more help you can get through insurance in covering those costs the better.

As a public adjuster, Matthew Blumkin, a principal and public adjuster at the Greenspan Co./Adjusters International in Encino, California, has seen numerous home insurance claims relating to mold.

“Every home across the country has some level of mold in it because it’s organic, and a lot of times it’s innocuous enough,” he says. “But when you have an event that causes water to impact the home, such as a storm, broken pipe or firefighting efforts, the mold can spread, leading to a serious situation. The greatest concern about mold for insurance claims is whether it existed before or after the event.”

Blumkin says that when water or moisture damage is not cleaned up quickly, such as after wild fires and other natural disasters, the situation gets even worse.

“We find that time is the biggest problem resulting in a mold claim. The longer it sits, the more it grows. The more it grows, the harder it is to deal with,” he says.

The other challenge with making a mold insurance claim is understanding your coverage. Some home insurance policies cover mold caused by covered events. For example, you have a burst pipe, which is covered, and mold results from the incident.

Generally, policies offer no coverage for mold due to maintenance issues. For example, don’t expect insurance to help if you had a pipe that leaked for a while and caused mold, or you have mold due to a humid climate.

But even with “covered events,” policies could contain mold exclusions.

Strategies for a mold insurance claim

If you do have mold coverage in your home insurance policy, Blumkin advises you to make sure that only the additional cost for mold remediation above what would normally be charged if mold were not present is applied toward your policy’s mold limitations, rather than the full repair cost.

For example, if restoration crews are cutting out wet or burnt drywall, only the additional cost for handling moldy drywall rather than regular damaged drywall should be placed into the mold remediation category.

“The fact that it was moldy doesn’t mean that 100 percent of the removal cost goes into the [policy] mold limits — only the increased cost to deal with mold on the drywall should go into the mold limitation amount,” Blumkin says.

So, for example, if it costs $1 per square foot to remove drywall that is damaged or destroyed as part of the covered event but it’s $1.10 per square foot to remove drywall with mold on it, only the extra 10 cents should be applied toward the mold coverage amount. The remaining $1 should be considered as regular damage coverage.

Dealing with mold

Mold is everywhere, but usually doesn’t pose a problem. How can prevent it from growing and causing a problem? The Environmental Protection Agency says that the key to mold control is moisture control.

You may have to do an analysis of the building to determine the source of moisture that is creating the environment for overgrowth of mold, whether it’s leaking plumbing or another source of excess moisture. Then, you have to stop that source of moisture so that the humidity levels are controlled. Oftentimes, engineers will put in ventilating fans that will turn on automatically when the humidity gets high,” says Crosthwait. “Dehumidifiers and sub-pumps can also help.”

Jeff Schwenk, president of Continental Machinery Co., advises homeowners facing mold problems to only use certified mold remediation specialists.

“If you’re a homeowner and you do identify mold, the best thing to do is hire a firm that specializes in mold remediation and has all of their certifications. It’s probably not the kind of thing you want to try to remediate by yourself,” he says.

But will insurance companies pay for these advisors and their suggested repairs? According to Blumkin, it depends on how much coverage you purchased when you bought your policy.

He suggests sitting down with your agent or broker to understand the coverage limits for mold remediation.

“It can get expensive to repair mold, so the more help homeowners can get in covering those costs [through insurance] , the better,” says Blumkin.

Mold can be an homeowner headache, but by taking preventive measures, you can resolve many issues. If you wind up with a mold problem, your homeowners policy could help you tackle the issue. 

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