Does Homeowners Insurance Cover Mold Damage?

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Is mold covered under a standard homeowners insurance policy?
When and how does homeowners insurance cover mold?
How much do I have to pay if homeowners insurance does cover mold?
If homeowners insurance doesn’t cover mold, what will?
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Is mold covered under a standard homeowners insurance policy?

As a new homeowner, I’m curious about what all is covered under my insurance. I know that water damage is one of the biggest and costliest disasters homeowners deal with, and that it can result in mold. I’m worried about not only the health factor concerning mold, but also the process of removing it—and whether the cost would be covered by my insurance. Is mold covered under standard homeowners insurance policies?

Well, it depends. Yes and no. Like many other things, when it comes to mold, the cause of the outbreak will determine whether it’s covered by your insurance or not. Most standard homeowners insurance policies provide coverage for mold and mildew under certain circumstances, but not all. We’ll take a closer look at when it is covered and when it’s not in the following section.

When and how does homeowners insurance cover mold?

Mold is caused by an excess buildup of moisture that remains stagnant and is unable to dry out over a long enough period. It can grow due to something as simple as excess humidity, or something more complex like water damage inside the home. As with other things that homeowners insurance provides protection for, the cause of the mold must be due to a covered peril. Let’s break down some specifics.

Standard homeowners policies typically provide coverage for mold in the following scenarios:

• Water damage due to plumbing issues: A broken pipe or faucet that causes a leak or flooding in the home and eventually leads to an outbreak of mold is usually covered. This includes the home’s structure and personal property. Your homeowners policy will typically cover costs associated with fixing the water damage and removing the mold.
• Water damage due to covered natural disasters: If your home suffers extreme water damage due to a covered natural disaster (e.g., lightning, windstorm, hail, blizzard, or fire) and molds as a result, your homeowners insurance policy should provide coverage for both the water damage and the mold.

Homeowners insurance typically does not cover mold due to the following:

• Negligence or failure to maintain home: Many accidental causes of mold outbreaks are not covered by homeowners insurance. If you install carpet in a damp space (like the bathroom), the mold removal and carpet replacement probably won’t be covered.
• Outbreaks due to warm climates: If you live in a warm, humid climate and fail to leave the AC on and you experience a mold outbreak as a result, homeowners insurance isn't likely cover you.

It’s important to review your specific homeowners insurance policy with your independent insurance agent so you can better understand exactly when you’ll be covered for mold treatment and removal. However, the best offense against mold is a good defense. Work to keep your home mold-free and prevent these issues in the first place, especially since in many cases your standard homeowners policy probably won’t cover you.

How much do I have to pay if homeowners insurance does cover mold?

Well, in the event that the mold outbreak occurs due to a covered peril such as water damage from a busted pipe or natural disaster, you’ll be covered up to your policy’s limit in the structure of the dwelling category or your personal property category. It depends on what the mold has damaged. Limits for the personal property category of homeowners insurance will vary by policy, but you can always purchase more coverage.

First, you’ll have to meet your policy’s deductible. A standard homeowners policy has a deductible that’s typically 1% of the home’s value, so if your home is worth $300,000, you might have to exceed $3,000 in damaged personal property (including damage from things like water and mold) before your insurance will start paying. However, you can work with an experienced independent insurance agent to get a policy with a lower deductible.

If your homeowners insurance covers mold removal in one area of the home but you have outbreaks in other areas as well, you can purchase additional coverage to get those areas of the house cleaned up, too. However, this type of coverage is expensive and it’s not commonly added. It’s best to just prevent mold outbreaks as much as possible in the first place.

If homeowners insurance doesn’t cover mold, what will?

If the cause of your mold outbreak isn’t considered to be a covered peril under your homeowners insurance policy, unfortunately you’ll probably be stuck paying out of pocket for it. There isn’t a type of insurance available specifically to protect homeowners against mold infestation. That’s why it’s so important to keep up with your home’s routine maintenance and to keep it as clean as possible. Remember, the best offense is a good defense.