Mold Coverage

Jan. 31, 2003

The following are program notes of the insurance panel presented at the Arizona Water Quality Association October 2002 program, reprinted with permission from the AZWQA.

As stated at the Arizona Water Quality Association meeting in October 2002 by

Sean Gillespie, claims manager at Allied Insurance, mold is becoming the "new asbestos" to insurance companies. More and more, mold is resulting in damage claims.

The following are program notes of the insurance panel presented at the Arizona Water Quality Association October 2002 program, reprinted with permission from the AZWQA.

As stated at the Arizona Water Quality Association meeting in October 2002 by

Sean Gillespie, claims manager at Allied Insurance, mold is becoming the "new asbestos" to insurance companies. More and more, mold is resulting in damage claims.

There are some things you can do to mitigate mold damage, starting with response time. If you respond within 24 hours of mold inception, you have the best chance of limiting damage, since it usually takes 24 to 48 hours for the mold growth to accelerate.

Mold needs three things to grow.

*                The right temperature.

*                Moisture

*                A food source such as sheet rock, baseboard or ceiling tiles.

Molds can cause everything from severe allergic reactions to lung disease, cancer, neurological disorders and sometimes even death.

If you don't see any evidence of mold, there probably is not any.

If there is evidence, obviously you need to shut off the water source causing the problem and remove excess water with towels or a vacuum and dry the affected area. Limit contact with wood furniture or fibrous material. If you cannot move the wood furniture, place it on a block or aluminum foil. Pull back the carpet and remove the pad, if possible. If the damage covers a larger area such as several rooms you should consider calling in an outside service firm that has the heavy-duty equipment to tackle the problem.

"Should you or an employee improperly install water equipment or should your equipment fail, you can be liable for a mold claim if the customer's home is not properly cleared of water," reports John Larkin, president of the Pure Water Insurance.1 (Visit www.wqa.org for the full article.)

If you do see mold evidence, deal with it as quickly as possible. There is no set guideline on when you need to call in a professional service firm when dealing with mold damage. However, New York City does have a guideline that tends to be followed by the mold and remediation companies and others. The guideline sets out four levels of mold and it is recommended that an outside firm be brought in if you reach level three. (See Table 1.)

Remember, mold insurance coverage is available, but it is expensive. Most coverage does not include mold and some carriers have permission from certain states to exclude mold from policies. Be sure to check with your insurance representative for questions on your coverage as well as any advice for taking care of what could be a costly claim later on.       

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