Your standard homeowners insurance policy may cover mold damage under your personal property coverage, but only if the mold is a direct result of a covered peril. But since this will vary on a case-by-case basis, homeowners insurance will often exclude it. Mold coverage is sometimes available as an endorsement or rider — in other words, an optional coverage at an added cost.
Most homeowners insurance policies exclude mold coverage, except when it is related to a covered peril like a plumbing leak.
When Does Homeowners Insurance Cover Mold?
Mold removal is covered by homeowners insurance only if it is the result of a covered claim like water leaks. Because these types of damages often cause the growth of mold, homeowners insurance covers them under the named peril. Here are a few examples of when standard home insurance may cover mold damage.
- Mold as a result of accidental incidents like a water heater rupture or a frozen or burst pipe
- Mold due to a malfunctioning appliance, such as an overflow resulting from a malfunctioning AC unit
- A fire where mold develops after extinguishing flames
Not only is mold expensive to remove, but it can also be difficult to track down its cause. This is why mold coverage is often not covered in a homeowners policy or is expensive to include.
Your homeowners insurance will cover mold damage only when it is related to a named peril. For example, water leaks and equipment malfunction like broken water heaters and dishwashers are considered accidental and sudden causes of mold.
In this case, if your insurance policy has peril coverage specifically for water leaks and equipment malfunction coverage, it will cover mold damage under that named peril. That said, if the cause of mold is not included in your dwelling coverage, it will not be covered.
When Doesn’t Homeowners Insurance Cover Mold?
Most homeowners insurance policies will refuse coverage for many instances of mold. Mold is often a result of maintenance issues. Hence, neglect or lack of upkeep may be grounds for your claim to be denied.
The minute you encounter a minor leak in your kitchen or bathtub, you should report the damage immediately. Your homeowners insurance provider should be able to set up mold remediation, which is a way to prevent mold from growing.
If you live in a high-humidity or mold-prone state and do not install a dehumidifier, your insurance provider may consider it as neglect. If you have poor ventilation and fail to control the air quality and moisture levels to prevent mold from growing, you could also get a denied claim.
In addition, if you are insuring a home with another insurer or are insuring your home for the first time, your insurer may refuse coverage if they consider your home as high risk, such as when there was a prior mold infestation.
You may also not be able to request mold removal after a storm that resulted in flooding and eventually in mold growth since flood coverage requires a separate insurance policy.
How to Protect Yourself From Mold
Expect to pay a significant amount to remediate a property infested with mold. While the best homeowners insurance can protect you against some forms of mold damage, preventive measures will minimize the chances of having to deal with a mold issue altogether.
Before buying a policy, it’s important to know your homeowners insurance needs. Check whether your insurer provides mold coverage and what type of mold growth is covered. Some insurance providers may offer mold coverage but impose a limit on claims to reduce the amount they need to pay. In this case, you can either switch insurers to get this specific coverage or pay more to get coverage above the imposed limit.
Preventing mold from even developing is the best way to deal with this peril. Regulating the humidity levels in your home, controlling air quality by installing exhaust fans and dehumidifiers and maintaining proper upkeep of your home could help you save thousands in the long run. Make sure to regularly clean and dehumidify areas, especially those that are most likely to grow mold. Periodically check your walls and cabinets for dampness.
Flood Insurance Policy
Regional flooding isn’t usually a covered peril in standard homeowners insurance. Because mold won’t be covered if it is a result of flooding, you may want to get a separate insurance policy if you live in an area that is at high risk for flooding.
Where to Buy Homeowners Insurance
To protect your home from various perils, you can choose from a number of insurance companies, like State Farm or Hippo. Since you may have unique coverage needs, such as mold, comparing homeowners insurance is an important step before buying a policy.
While a typical homeowners insurance policy costs $175 per month, expect premiums to be cheaper or more expensive depending on how much stuff you own. You may use MoneyGeek’s personal property calculator to get an estimate of how much it will cost you to get homeowners insurance.
About Mark Fitzpatrick