Homeowners insurance covers mold damage if it was caused by a "covered peril." Otherwise, an insurance company will likely not cover mold damage. There are exceptions, which we will get into later in this article.
Home insurance policies usually don't cover mold that resulted from a preventable water leak, flooding, or high humidity.
Home insurance companies also typically don't pay for maintenance issues that insurers think a homeowner should have prevented. Insurers expect homeowners to proactively take care of those problems before they need to file an insurance claim.
Home insurance covers mold if a "covered peril" caused the mold. In that case, your home insurance policy will likely pay for repairs and clean-up.
Here are some of home insurance's covered perils:
- Vandalism or malicious mischief
- Damage caused by vehicles
- Falling objects
- Weight of ice, snow, or sleet
- Accidental discharge or overflow of water or steam from plumbing, heating, air conditioners, sprinkler systems, or household appliances
- Frozen pipes
Let's take a look at some real world examples. When home insurance will likely cover you:
- An ice dam forms in a roof gutter during a rough winter. Water backs up under your shingles. The water leaks into your attic, soaks your attic floor and insulation, and creates mold.
- A pipe bursts in your home and dumps gallons of water on the floor and saturates drywall while you're at work. Mold begins to form before you call.
- A washer hose springs a leak and damages behind your washer. The washer hose isn't old, you stop the leak, and report the damage immediately, but not before mold forms.
These are "sudden and accidental" incidents. Insurance companies typically cover this type of damage. In fact, non-weather-related water damage is one of the most common home insurance claims and one of the most expensive.
When home insurance will likely NOT cover you:
There are many instances when your home coverage won't protect you. Here are some examples.
Your basement pipes freeze and burst. You don't notice it for a few weeks. Now, you have a few inches of water on your floor and mold growing.
Broken shingles on your 40-year-old roof allows water into the attic. Water saturates wood and insulation and leads to mold in the attic.
Mold forms in your shower. You don't think much about it until one day you notice that it's really unsightly and you're concerned about whether it's making your family sick.
In these cases, an insurer will likely not cover the damage. Why? An insurance company expects you to take care of your house. That means properly ventilating the bathroom, replacing an old roof, and checking your basement regularly. An important reason to stay on top of home maintenance.
Also, the standard homeowners insurance policy doesn't cover water damage caused by a flood. Thus if a flood causes water damage that leads to mold, the resulting mold issue wouldn't be covered by your home policy.
A separate flood policy will cover mold and mildew, as long as it’s not caused by the homeowner’s failure to inspect and maintain the property after the flood. That means, once you can get back into your home, you need to start trying to clean up and keep mold from growing or spreading.
How do I know if my home insurance policy covers mold?
Home insurance companies usually don't cover mold damage unless it's directly related to a "covered peril." The good news -- there are exceptions.
Check your homeowners insurance policy to see if there is any language about mold claims. Some insurers offer limited coverage for mold claims. This may mean limiting how much the insurer will pay for a mold-related claim. Or an insurer may increase the cost of a home insurance policy if you have mold-related coverage.
If you don't have mold coverage, you can buy an endorsement to your insurance policy that adds mold coverage. An endorsement is when an insurance company adds additional coverage to a regular home insurance policy, for an additional fee.
Some home policies provide a limited amount of coverage for mold claims. This can be by capping the amount the insurer will pay, for example at $5,000, or stating that the insurer will only pay for certain services, such as clean-up, and excluding others, such as testing and remediation.
What if my home has had mold problems before?
Insurance companies hate risk. In fact, the insurance industry is all about limiting risk.
Risky homes, such as old homes with old wiring and plumbing, and risky areas, such as high-crime neighborhoods or homes near woods that often catch fire, usually have more claims. Insurance companies don't like paying out many claims.
The same goes for a home with mold or ones with previous mold-related claims. Insurance companies view those homes as risky.
In that case, your insurance company will likely decline a mold endorsement or charge you a lot for that coverage.
That means it might be worth paying for the mold removal yourself.
How do I file a mold damage claim?
Similar to any other home insurance claim, contact your insurance company as soon as possible to file a mold claim.
If you're not sure if your policy covers mold damage, check your home insurance policy or call your insurance company.
Mold grows quickly so take photos and then stop the source of the leak and clean up the water before calling your insurance company. An insurance company expects you to be proactive in fixing problems and avoiding further damage.
Here are the steps to take:
- Stop the leak. You might need to shut off the water to your home if you have a leaky pipe or patch a hole if there's water coming from your roof.
- Remove the water with a mop or wet vac. If there's a lot of damage or clean up, call a company that specializes in removing water and clean-up.
- Remove rugs, insulation, and any other materials that can collect water and become breeding grounds for mold.
- Open windows and doors and use fans to dry out the area.
- Wash the area thoroughly. Use non-ammonia detergent and water to clean hard, nonporous surfaces, such as metal, glass, wood, and plastic. Scrub rough surfaces like concrete. Disinfect with water and bleach. Don't mix bleach with ammonia or other household cleaners. Wear non-porous gloves and eye protection.
- Call your insurance company with detailed information as to damages, what happened, and what prevention and clean-up you've done. Document what's damaged, how much you paid for them, and when you bought them. Take photos.
Don't throw the materials away until you call your insurance company. Take photos and keep the damaged materials. An insurance adjuster might want to see the damaged materials. Put them in a garage or another place that's away from your living areas until you meet with an insurance adjuster.
If you're concerned about possible health risks, discuss with your insurance company if there's a need to move out of the house. If you do need to move out until the mold is removed, determine how much additional living expenses (ALE) your home insurance will provide you.
How to prevent mold
Mold forms and spreads quickly so it's important to prevent mold by reducing moisture.
The Centers for Disease for Disease Control and Prevention suggests the following ways to control mold growth:
- Control humidity levels
- Promptly fix leaky roofs, windows, and pipes
- Thoroughly clean and remove water after flooding
- Ventilate shower, laundry, and cooking areas
Mold needs moisture and a "food source" to grow. Food sources include insulation, drywall, carpeting, and mattresses.
Mold is most commonly found in places with high humidity. That can include under leaky pipes and appliance hoses, in attics under a leaking roof, and in basements with drainage issues.
Buying mold insurance
If you want mold insurance and it's excluded from your homeowners insurance policy, ask your home insurance company if you can add an endorsement to your policy. An insurer bases the cost on your home and area's risks.
Mold endorsements will cost you more in humid areas and in older homes made with materials more prone to mold. The cost can range between $500 and $1,500 annually.