Water Damage and Mold

Under a standard home insurance policy, mold damage (like damage from rust and dry rot) is specifically excluded from the coverage, unless it's the result of a sudden and accidental water discharge, such as a burst water pipe, blown washing machine hose, or water used to put out a fire.

Typically excluded from standard home insurance policies are damages resulting from

• Normal wear and tear
• Poor maintenance (you should have replaced the shower gout, but didn't
• Standing surface water (unless it's floodwater and you purchased separate flood insurance)
• Construction mistakes or defects (nails accidentally driven into water pipes, or faulty home design)

You need to understand what's covered under your policy (and what's not) so you can accurately report your claim to your insurer. This removes any excuse for the insurer to improperly deny your claim. Even if you have a legitimate water-damage or mold claim, you may find your policy has additional coverage restrictions in place. These include financial caps (anywhere from $5000 to $100,000) that limit the amount and insurer pays for property damage and liability claim related to fungi, wet or dry rot, or bacterial damage. Liability insurance offers policyholders some financial protection from lawsuits.

HOW TO HANDLE WATER AND WATER-DAMAGE CLAIMS

  Once you've identified a potential water-damage or mold claim, you should:

• Stop the water leak or flow of water
• Notify your insurer immediately. If you let any damage fester and do not report immediately, you claim may be denied. Remember, sudden leaks are covered, but chronic leaks are not.
• Ask what if requires of you. Your duties, as outlined in most home insurance policies, may include:
  1. Giving prompt written notice to your insurer of the facts surrounding your claim.
  2. Protecting your property from further damage.
  3. Performing reasonable and necessary repairs to protect your property.
  4. Keeping an accurate record of your repair expenses.

• Make a list of your damaged property and photograph or videotape the damage before making repairs.
• Don't make large structural or permanent repairs. Only make temporary repairs to protect your home and belongings until your insurer has the opportunity to inspect the damage and gives you authorization to make permanent repairs. The insurance company may deny your claim if you make permanent repairs before it inspects the damage.
• Remove standing water and begin drying the area.

• Remove water-soaked materials
• Keep removed materials and move them to a secure, dry, and well-ventilated area, or outdoors.
• Keep all receipts. For personal property claims, you must provide evidence that you bought the replacement items. If you bought materials for temporary repairs, receipts will help you get reimbursed.
• Do not throw away removed or damaged materials until instructed by your insurance company.
• Do not jeopardize your safety.
• Don't exceed your personal financial or physical capabilities.

WHAT TO EXPECT FROM YOUR INSURANCE COMPANY

• Unless there's a major catastrophe where you live, such as a hurricane or flood, your insurer should contact you within 24 hours (one business day) of receiving notice of your claim. At this time, the insurer should share information regarding emergency repairs and mold prevention. If you home has an active leak, you insurer may verify that you've shut off the water.
• Your insurer may also advise you to contact a qualified professional such as a plumber, to fix the problem. Although your insurer may provide you with a list of people companies qualified to do the job, it's your right to select the qualified professional of your choice, even someone who is not on your insurer's list.
• Your insurer may provide the name and contact information of a company representative and advise you that multiple individuals may be involved with the investigation and processing of your claim. However, one insurance company representative should oversee your claim and be available to answer questions.
• Barring a natural disaster, your insurer should send a company representative to your home within 24 to 72 hours of notice of the claim.
• Determine whether your claim is covered and provide an initial estimate of damage within 7 to 14 days after the company representative's initial onsite visit. This initial estimate is subject to change. Within the same time frame, your company should strive to provide you with a written statement confirming or denying coverage.
• Return all phone calls within 24 hours.

NOTE: Policy provisions require you to provide your company with a written notice of claim, but on most water damages claims your initial contact should be via telephone. Initial contact may be with your insurance agent, a claims office, or the toll-free number included in the policy. Have your policy number available and be prepared to provide information on the extent and severity of the water damage. Be aware that your home insurer's practices may contradict accepted mold prevention procedures if the company prevents you from removing from wet building material from your home within 24 to 48 hours of a flood or water intrusion. Make sure you reiterate to your insurer in your telephone conversation and in writing that you need approval as soon as possible to remove water-soaked materials from your home in order to prevent a mold infestation.

Important!
Under most home insurance policies, your insurer is responsible for paying the actual and necessary cost to repair or replace the damaged part of your home with material of "like kind and quality,", subject to your limit of liability and all other policy provisions. However, your insurer is not responsible for paying any claims that do not exceed the policy deductible.