Despite hurricanes, insurance may not cover mold

Surviving a hurricane is one thing. Working with your insurance company to cover the damage in your home is another -- especially when it comes to damage caused by mold.

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By way of explanation, molds are fungi. There are tens of thousands of different species. According to the Centers for Disease Control, the most common household forms are Cladosporium, Penicillium, Alternaria and Aspergillus. Some people are sensitive to molds and can experience allergy-like symptoms such as a stuffy nose, irritated eyes and wheezing. Severe reactions, the CDC says, can include fever and shortness of breath.

On a homeowner's insurance policy, mold damage is only covered if it is the result of a covered peril. As that relates to the hurricanes, a typical homeowner's policy would cover mold damage if mold grew because the storm damaged a roof or blew out windows and rain drenched the ceiling and walls, according to the Insurance Information Institute. However, if mold is the result of flooding or storm surge, it's excluded. That type of damage is generally covered under a federal flood insurance policy.

In recent years, mold has found a prominent place in the news because the number and dollar amount of insurance claims and lawsuits involving mold in buildings have skyrocketed. As a result, many insurers in several states limit the amount of coverage available for mold cleanup or won't cover mold damage at all.

The exclusion itself is nothing new, says Eric Goldberg, assistant general counsel for the American Insurance Association. Damage from mold, fungus, dry rot and termites typically isn't covered because it's considered to be the result of a failure to maintain the home. The limits were put in place after the explosion of claims and lawsuits. In nearly every state, Goldberg says, insurance companies filed with insurance regulators for a dollar sub-limit on mold remediation.

It's important to understand what the sub-limit addresses, Goldberg says. If you have wet drywall, insulation, carpet, furniture and the like that needs to be replaced, that's water damage, not mold damage. If the insurer needs to pay for something extra because of mold, such as installing a vapor barrier, or if someone had to put on a biohazard suit to do cleanup, that's where the sub-limit kicks in, he says.