Will Your Home Insurance Cover Mold Damage?

Baton Rouge, LA – The insurance company says it was a “routine notice” mailed to policyholders. The state says it was “misleading.”

The Subject of Controversy: Mold

Last month, State Farm’s 280,000 homeowners’ policyholders in Louisiana opened their mailboxes to find a notice reminding them that mold and fungus is excluded from any insurance coverage offered by the company.

The notice informed policyholders that the “Fungus Exclusion Endorsement” adopted by State Farm does not allow for this special coverage.

State Farm Broker Dalton LeBlanc of Houma says the decision was made because insurers found themselves in a situation where they couldn’t foot the bill for the recent onslaught of mold claims in Texas.

LeBlanc said it should have little impact on the Houma-Thibodaux area, which has had few, if any, mold claims in recent years.

“It is already excluded in our policies, but the endorsement is probably due to the problems they had in Texas where there were large mold claims,” he said.

LeBlanc calls the mold situation “special” because it is one of the only events that a policyholder cannot obtain insurance for.

“It’s an Industry Trend,” He Said

The recent tide of mold claims is a new development for insurance companies. In recent years, policyholders have claimed to have found fungus or mold in damp or humid areas, especially in homes affected by flooding. Spores enter buildings through the air or on people, animals and objects that are brought into the structure.

Studies say only a few molds can cause infection in healthy humans. Some molds cause infections only in people with compromised immune systems, severe allergies and asthma. Other molds produce powerful chemicals called “mycotoxins” that can produce illness in animals and people.

Scientific knowledge about the health effects of these toxins on humans is quite limited, but recent cases have resulted in rashes, headaches, nausea, breathing problems and brain damage.

Nonetheless, acting Commissioner of Insurance Robert Wooley says State Farm is in error.

“The Louisiana Department of Insurance requires an insurance company to cover mold damage resulting from a sudden or accidental covered event.

“The expenses for repairing or replacing the damaged property, including the costs to disinfect mold, are covered,” he said.

Wooley says one example of a sudden and accidental covered event would include, in most cases, a pipe in your home or business that bursts due to freezing weather, causing water damage that results in mold.

Yet a standard homeowner’s policy does not provide coverage for seepage, damage arising from wear and tear, or the failure to do proper maintenance, he said.

In Louisiana, as in most other states, insurers do not have to pay for mold claims that arise from slow leaks associated with home maintenance problems. They also do not have to pay for mold testing.

As a result, Wooley is calling upon State Farm representatives to work out the problem.

“I have scheduled a meeting with State Farm executives later this month to sort out any confusion. But policyholders need to be aware that there is no blanket exclusion for mold coverage in Louisiana,” he said.

Author: Contributor