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The pride of homeownership comes at a cost: footing the bill to repair problems like mold, for instance. Issues with mold in a home can pop up quickly and easily result in tens of thousands of dollars in needed repairs. Standard homeowners insurance typically does not cover damage from mold, but in some cases you might be able to tap your insurance coverage to pay for mold repairs.
Whether mold damage is covered usually depends on what caused it. If the damage resulted from a "named peril" in your homeowners policy, your insurance may cover it. If it wasn't, and you don't have a special policy such as flood or water backup insurance, you may have to pay for repairs yourself.
When Does Homeowners Insurance Not Cover Mold?
Some homeowners insurance policies do cover mold, but limit the amount they will pay for mold damage—typically to $5,000. Insurers may sell additional mold coverage as an endorsement to a standard policy.
Generally, whether mold damage is covered depends on whether what caused it is covered by insurance. Although coverage varies based on the specifics of your policy, here are some common scenarios where homeowners insurance likely wouldn't cover mold damage:
- Mold due to a flood: Standard homeowners insurance policies don't cover flood damage due to floods; you'll need a separate flood insurance policy. Flood insurance may cover mold damage if the mold can be directly attributed to the flood.
- Mold resulting from a sump pump failure or a backed-up drain, sewer or septic tank: Homeowners insurance generally doesn't cover these risks, but you can usually buy extra coverage for them.
- Mold caused by a sinkhole: Sinkholes aren't covered by standard homeowners insurance. If this risk is common where you live, insurers may sell stand-alone sinkhole insurance.
- Mold due to melting snow on the ground seeping into your home: Typically, water damage from below isn't covered by homeowners insurance. However, it may be covered by flood insurance.
- Mold resulting from negligence: Home insurance is intended to protect against "sudden, accidental" disasters—not against problems that develop gradually due to neglect. For instance, mold caused by poorly sealed windows; overflowing roof gutters; insufficient ventilation; or leaky appliance hoses, pipes and fittings generally isn't covered by insurance.
When Does Homeowners Insurance Cover Mold?
When homeowners insurance covers mold depends on the specific named perils in your policy. However, the following situations are typically covered:
- Mold from a leak: This may be caused by a malfunctioning dishwasher, washing machine, water heater or other appliance. Damage from this type of sudden failure is usually covered by home insurance.
- Mold due to a frozen or burst pipe: Such water damage, and any resulting mold, is generally covered by home insurance.
- Mold caused by putting out a fire: If water used to douse a house fire causes mold, it should be covered by insurance.
- Mold caused by melting snow or ice on the roof or by ice dams: Melting snow and ice or ice dams that clog your rain gutters can leak water into the house. Water damage that comes from above is generally covered by homeowners insurance.
Even if your insurance policy covers mold in certain situations, there may be limitations. Get details of your policy's mold coverage and exclusions in the full policy or by asking your insurance agent. Whenever you receive updates to your insurance policy, review them carefully for any changes to mold coverage.
How to Handle a Mold Claim
A covered mold claim generally pays for remediation and the cost of alternate living accommodations while repairs are made if the insurer deems your home uninhabitable during repairs. Check your policy for your coverage limits and deductible.
Documenting the damage and your remediation attempts with photos will show that you did your best to prevent mold and may make it easier to get your claim approved.
United Policyholders, a nonprofit organization that educates consumers about insurance, recommends the following when filing a claim for water damage:
- Prove you took steps to prevent mold. After water damage occurs, completely dry carpets, upholstery or anything wet. If you can't dry it, get rid of it. Remove any standing water. Wash and disinfect any flooded areas with bleach and dry them thoroughly.
- Keep records of your mold prevention attempts, including any receipts.
- Document the damage and your remediation attempts with photos.
- Don't suggest reasons the mold may have occurred or agree with your insurer about possible causes until after the insurance company completes its investigation.
- As part of repairing the water damage, ask if your insurance company will include mold remediation treatment to prevent or detect mold. If mold develops later, the insurance company may not agree that the original source of water damage caused it. Even if they agree to cover the mold remediation, you'll have to file a separate claim and pay your deductible again.
Prevention is your best defense against ever filing a mold claim. Maintaining your home's systems, checking for moisture after storms or heavy rains, and keeping bathrooms clean help inhibit mold.
How Can You Save on Homeowners Insurance?
Purchasing extra homeowners insurance such as mold endorsements can add to your premiums. You can trim your insurance costs by increasing your deductible or buying another policy from the same company (called bundling). Ask your insurer if you're eligible for discounts for loyalty, going claim-free for a certain period, or membership in groups or associations. Every year or two, shop around with other insurance companies; they may charge less for the same coverage.
Maintaining good credit may also help reduce insurance costs. Insurance companies in most states can use your credit-based insurance score to set home insurance prices. Like your regular credit score, this score considers credit report data such as payment history, account balances and applications for new credit. Improving your credit score might help you qualify for more affordable homeowners insurance.