What Is a Covered Peril for Mold Damage?
Demystify mold damage insurance coverage. Learn how homeowner policies define covered perils and what actions to take.
Homeowner’s insurance coverage for mold damage hinges significantly on its underlying cause. Many policyholders mistakenly assume all mold issues are covered, but this is rarely the case. Policies typically do not provide blanket coverage for all types of mold.
Understanding Covered Perils
A “peril” refers to an event that causes damage or loss to your property. Common perils include fire, theft, windstorms, or lightning strikes. Your insurance policy outlines which specific perils are covered.
Policies generally fall into two categories: “named perils” or “open perils.” A named perils policy covers only risks explicitly listed. An open perils policy offers broader protection, covering all causes of loss unless specifically excluded. Mold itself is not a peril; it is a result of another event. For mold damage to be covered, it must originate from a peril included in your policy.
Mold Coverage Under Standard Policies
Standard homeowner’s insurance policies often cover mold damage stemming from a sudden and accidental covered peril. If a pipe suddenly bursts and causes water damage leading to mold growth, remediation may be covered. This also applies to water damage from an accidental appliance overflow, such as a washing machine or dishwasher.
Damage from storms, like rain entering through a wind-compromised roof or window, can also lead to covered mold. If water used to extinguish a fire causes dampness and subsequent mold, your policy may cover the damage. Many policies include specific sub-limits for mold remediation and removal. A sub-limit represents the maximum amount the insurer will pay for a particular loss, typically ranging from $1,000 to $10,000.
Exclusions for Mold Damage
Many situations result in exclusions from standard homeowner’s insurance policies. Mold from gradual or long-term leaks or seepage is typically not covered. This includes issues like a chronic roof leak or a slowly leaking shower pan, as insurers consider these preventable through routine maintenance.
Mold arising from a lack of maintenance or neglect, such as failing to fix known leaks promptly, also falls under common exclusions. Furthermore, mold caused by external floodwaters is explicitly excluded from standard policies and requires a separate flood insurance policy for coverage. Other common exclusions include mold from sewer backup or sump pump overflow, unless specific endorsements for water backup coverage have been purchased. Mold from construction defects or general high humidity without a specific covered peril are additional scenarios where coverage is typically denied.
Initial Steps for a Mold Claim
If you discover mold that you believe originates from a covered peril, taking immediate and precise actions is important. Begin by thoroughly documenting the damage with photos and videos of the mold, the source of the moisture, and any affected property. Clear, timestamped evidence is valuable for your claim.
Next, try to pinpoint the exact origin of the moisture, such as a burst pipe or a roof leak, and assess whether it was a sudden and accidental event. Taking reasonable steps to prevent further damage is also important, such as turning off the water supply or drying affected areas, but avoid extensive remediation before contacting your insurer. Promptly notifying your insurance company about the damage is a crucial step. Be prepared with your policy information when you make the call. An insurance adjuster will likely inspect the damage to determine its cause and extent, and whether it qualifies for coverage under your policy terms.