Does My Policy Cover Mold?

Thu Aug 16 2018

yellow house and flooded street in the foreground

Does your home insurance policy help with mold clean-up? It depends on what caused the mold – and your policy.

Mold happens – just ask anyone who hasn’t finished a bowl of grapes in time. But when it happens to your home, it can lead to dangerous and unhealthy conditions, as well as high clean-up costs.

The good news: many homeowners insurance policies cover mold damage, at least to a certain extent. Let’s look at how homeowners insurance covers mold and how you can minimize the risk of mold taking over your home.

Is Mold Covered by Home Insurance?

The answer, like all things in insurance, depends on your specific policy. Most policies, including the ones offered by Kin, offer some coverage for mold damage. In our policies, it’s described as “limited” coverage for “fungi, mold, wet or dry rot, or bacteria,” and the coverage typically includes:

  • Up to $10,000 of coverage for losses to your home or property.
  • Up to $50,000 of coverage for damage to a third party because of exposure to fungi, wet or dry rot, yeast, or bacteria (e.g., if a guest inhaled mold spores at your house and got sick as a result).

The average cost of mold remediation in the United States is $2,217, with a “high-end” job costing about $6,000, though costs fluctuate somewhat by region. But generally, the coverage limits listed above should be adequate for a “typical” mold remediation job.

However, that coverage usually only kicks in when the mold is caused by a covered peril, like a burst pipe. That means mold from external flooding (e.g. sewer backup) is most likely not covered.

Your insurer might also deny coverage if the mold was caused by your negligence. For example, if you have mold growing in your house because you ignored a leaky pipe, then your insurance company might not pay for mold remediation.

And lastly, your insurance company usually doesn’t cover mold damage that was already in your home before you purchased the policy. Unfortunately, home inspections don’t cover mold, but you can ask an inspector if they see any obvious signs of water damage and the possibility of mold.

Absolute Mold Exclusion in Insurance Policies

Some insurance policies have an absolute mold exclusion. This means that no matter what caused the mold, the insurance company will not pay for the damages. These are rare in homeowners insurance, but you should find out if your policy has one.

The best way to understand exactly when your home insurance covers mold remediation is to speak to your insurance provider and get them to explain the pertinent sections.

What Water Damage Does Homeowners Insurance Cover?

In most cases, homeowners insurance covers the sudden or accidental discharge of water in your home. That means standard homeowners policies cover water damage from perils like:

  • Burst pipes.
  • Household appliances that malfunction or flood.
  • Water that gets in because of a covered event (like a tree falling on your roof).
  • (Sometimes) Water and sewage that backs up into the house.
  • Water damage caused by hail or wind.

If these types of water damage cause mold and your policy offers mold coverage, it may pay for mold remediation. Home insurance does NOT cover damage from floodwaters. For that protection, you need flood insurance, which may offer coverage for mold caused by surge water.

How to Test for Mold in Your House

You can quickly test for mold by dipping a cotton swab in diluted bleach (one part bleach to 16 parts water) and dabbing it on the wall. If the spot lightens and keeps coming back after cleaning, it could be mold.

Contrary to popular belief, mold is not always obvious and can often hide in plain sight. Damp and humid areas are more prone to mold so you want to check for growth:

  • In bathrooms and shower rooms.
  • Behind your refrigerator and below your sink.
  • Beneath stacks of newspapers or cardboard.
  • Behind the drywall in wall stud spaces that contain plumbing lines.
  • Behind the wallboard around leaking windows.
  • In ventilation ducts.
  • Under carpeting that was once wet (due to flooding, carpet cleaning).
  • Behind acoustic ceiling tiles (if the roof is leaked).
  • Behind any drywall that has seen flooding.

How to Prevent Mold in Your House

The good news about mold is that prevention is largely a matter of standard home maintenance. The following steps can help you to prevent mold in your house:

  • Keeping your roof updated and watertight
  • Caulking cracks that could let water in
  • Updating windows and doors as needed to prevent leaks
  • Maintaining plumbing and appliances that use water
  • Repairing damage you see when it’s minor

That last point is important: mold damage is, in the beginning, mostly an aesthetic problem. But over time, it can weaken the infrastructure of your home and lead to serious damage or even injuries. So as with most home maintenance projects, an ounce of prevention is worth a pound of cure.