Does Homeowners Insurance Cover Mold?

Homeowners insurance is designed to cover you against various types of damage, but you may be wondering whether that includes mold. It’s a good question to ask, particularly if you’re purchasing an older home and want to avoid any potentially costly surprises. The answer isn’t always clear-cut. “Generally, standard homeowners insurance policies can cover mold to an extent,” says Sean Harper, CEO and co-founder of Kin, a Chicago-based insurtech startup. “It depends on what caused the mold.”

Here’s a look at the most common situations in which mold may—or may not—be covered by homeowners insurance.

Covered Perils and Mold Insurance

Homeowners insurance policies spell out a list of “covered perils,” meaning instances of damage to the home for which you’re eligible to file a claim. The main cause of mold formation is water seeping into the structure of your home, so you need to know which water-related covered perils are included in your policy.

For example, your policy may cover you if mold results from any of the following:

• Water leaks associated with a malfunctioning appliance
• Water damage caused by a burst hot water heater
• Water damage caused by firefighters extinguishing a fire in your home

In these instances mold would be “resulting damage” from a covered peril. It’s important to distinguish between resulting damage and initial damage. For example, if your water heater breaks and a leak causes mold to form in the walls, then your policy might pay for the walls to be repaired and the mold to be removed but not for the replacement of the hot water heater.

It’s important to note that the amount your policy may pay for mold repair and removal might not cover all of the resulting damage. “This extent of mold coverage is typically limited—for example, a company may cap mold removal and remediation at $10,000 for a single occurrence,” says Pat Howard, homeowners insurance expert at Policygenius. Higher coverage limits may be available, but if you’re unsure about what’s covered, Howard suggests talking to your agent to find out what options you have.

Mold Caused by Floods or Acts of Nature

In some cases mold can grow as a result of water damage from outside forces. Whether your homeowners insurance covers mold in that instance depends on what caused the damage to begin with.

“Mold that’s a result of storm surges, like floodwaters, is usually not covered by standard homeowners insurance,” Harper says. “That’s because standard home insurance policies don’t cover flood damage—you need flood insurance for that.”

If you have a flood insurance policy and your home is flooded due to heavy rains, a hurricane, or another act of nature, then your policy may extend to mold removal and repairs necessitated by flooding. Flood insurance costs on average around $700 per year in addition to your regular homeowners insurance premium, though it may cost more if you live in an area that’s at higher risk for flooding.

That may be worth the investment, however, if you’re concerned about mold resulting from a flood. According to FEMA, just one inch of water in your home can cause $25,000 in damage. Flood insurance with mold coverage could help mitigate some of the cost.

Mold that results from other acts of nature, such as a hurricane or an ice storm, may be covered under your homeowners insurance policy. For instance, if a hurricane tears your roof off and water gets inside the home, causing mold to grow, you might be able to file a claim for that along with other damages to the home.

Mold Resulting From Negligence

The third category of mold-related damage is associated with negligence on the part of the homeowner. What this means in simple terms is ignoring home maintenance or repairs to the extent that they allow mold to develop. “Mold typically isn’t covered by your homeowners insurance policy if it forms because of neglect or lack of upkeep,” Howard says. “If you knowingly could have prevented the mold by fixing leaky pipes or using a dehumidifier, your insurer won’t reimburse you for mold removal and remediation.”

Say that you notice the seal around the base of your toilet is leaking water. Instead of replacing the seal or the toilet, you let the leak continue, which causes damage to the subflooring. From there, mold sets in and spreads to the baseboards and walls. In that instance your homeowners insurance policy claim may be denied because you were in a position to prevent the mold from happening.

How to Avoid Having a Mold Damage Claim Denied

There are several things you can do to prevent mold and/or improve the odds of having your claim approved if you incur mold damage.

On the prevention side, you can:

• Install dehumidifiers in areas that are prone to dampness
• Regularly check plumbing pipes and fittings to look for leaks
• Adequately ventilate bathrooms, laundry rooms, kitchens, and other areas of your home where mold may have an opportunity to grow
• Keep gutters clean to prevent the formation of ice dams in winter, which can lead to leaks
• Regularly inspect your roof—and around windows and doors—and caulk cracks that could allow water to leak in
• Properly insulate interior and exterior pipes in winter to avoid breakages or leaks
• Routinely check appliances and hot water heaters for signs of leaks

If you have to file a claim for mold damage:

• Properly document the damage with photos and/or video
• Provide up-to-date maintenance records if you have them
• Follow any and all instructions the insurance company gives you to process the claim
• Contract approved mold removal companies to clean up the damage

What to Do if Your Mold Claim Is Denied

If your homeowners insurance company denies your mold claim, you may want to get a licensed contractor to offer a second opinion on what caused the damage. You could also attempt to appeal the denial with your insurance company if it has a specified appeals process. If not, your state insurance commissioner may be able to offer help on what you can do to get the claim approved or to file a complaint about denial.