When Does Homeowners Insurance Cover Mold?

Mold damage is costly and usually excluded from homeowners insurance—but certain situations and endorsements may offer coverage.

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Mold is usually a deceptive problem. It can lie hidden in your home for years. According to Ruby Home, mold is widespread in the United States, but its presence becomes a concern when concentrations exceed typical outdoor levels. A study conducted by Ju-Hyeong Park and Jean M. Cox-Ganser and published in the National Library of Medicine concluded that 47 percent of residential buildings in the United States had prevalent dampness and mold.

Mold remediation can be an expensive proposition. According to This Old House, professional mold remediation typically costs between $1,200 and $3,750. The average cost for most Americans is $2,300. And, unfortunately, your homeowners insurance usually will not cover this expense. But is there ever a time when mold is covered by insurance?

Preventable Mold Infestation Not Covered by Standard Policy

According to Policygenius, mold removal coverage is excluded if it was considered preventable.

Typically, if the mold is the result of neglect, it isn’t covered. This could include an ongoing leak. If the mold was the result of condensation from humidity, moisture, or vapor, it will not be covered by your standard homeowners policy, according to the Farm Bureau Financial Services (FBFS).

Floods Excluded from Homeowners’ Insurance Policy

Floods are notorious for causing mold. According to FloodSmart.gov, mold can start forming within 24 to 48 hours of flooding. But acting early can help prevent permanent damage and serious health risks.

Flood isn’t a covered peril under a standard homeowners policy, including mold remediation resulting from a flood.

Unfortunately, even if you have a policy under the standard National Flood Insurance Program (NFIP), mold damage is not covered.

According to FloodSmart, there may be an exception to this exclusion. If you are unable to enter your home to perform mold cleanup due to government restrictions on access or because floodwaters are still inside your house, there may be some coverage. You’ll need to contact your insurance provider to check coverage.

Mold Growth Due to a Covered Peril Could Trigger Coverage

According to the FBFS, homeowners policies may cover mold resulting from sudden, accidental water damage.

A sudden event or water damage could be caused by:

• accidental overflow, such as a toilet or washing machine
• freezing of your plumbing
• air conditioning or heating unit
• household appliances such as a refrigerator

If you have coverage on your insurance policy, it may include the cost to repair damage. Other coverage could be the cost to gain access and remove the mold. It may also cover testing to ensure the mold has been eliminated.

Mold and Fungus Endorsement to Homeowners Policy

An endorsement can be added to your homeowners insurance policy to provide coverage for damage caused by mold, fungus, and microbial growth.

According to Loti, which consists of licensed adjusters and other insurance professionals, this endorsement typically removes mold and repairs or replaces damaged property. It will also address the underlying cause of the mold problem, such as a leaky pipe.

How Does Mold Endorsement Work?

If mold spreads and causes $10,000 worth of damage to your carpet and furniture, the mold and fungus endorsement would help cover the cost of replacement. It would also cover the repair of any affected parts of the house.

In addition, it would cover underlying causes. For example, if a faulty roof allowed water to seep into your attic, causing mold, the endorsement would cover the cost of repairing the roof to prevent future mold. It would also cover the mold remediation costs.

Additional Living Expenses Coverage Due to Mold

If your home is uninhabitable due to mold contamination, additional living expenses coverage will help pay for temporary housing. It may also help with other living expenses while your home is being repaired.

Coverage Limits Apply Mold and Fungus Endorsement

Dollar coverage isn’t unlimited. Endorsements come with specific coverage limits and maximum claim amounts. And although these limits vary with insurer, according to Policygenius, you can typically purchase a limit up to $50,000.

Exclusions and Limitations to Mold Endorsements

Mold endorsements may come with limitations and exclusions. A common exclusion could include mold damage from maintenance issues, long-term neglect, or a preexisting condition.

A preexisting condition may be if the mold was already in the house before you purchased the policy.

Damage due to long-term neglect or a maintenance issue, if a leak was not repaired in a timely manner, may be excluded.

Adding Mold and Fungus Coverage to a Homeowners Policy

Assess your risk by seeing if you have the possibility of mold. If you live in a humid climate or have experienced water damage, your home may be susceptible to mold growth.

Once you purchase an endorsement, ensure the policy aligns with your needs and potential risks. Review the terms of the endorsement, including coverage limits, deductibles, exclusions, and special conditions.

You may also want to consider other endorsements, such as water or steam seepage coverage, to complement your mold endorsement.

Discuss your needs with an insurance agent. They can help you choose the best coverage options.

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