Oklahoma; where the mold comes whippin’ down the wall ! Mold is described in Webster’s dictionary as a fungus that produces a superficial growth on various kinds of damp or decaying organic matter. Mold loves sheetrock, by the way. Insurance companies don’t like mold claims and have several reasons to dislike mold damage. Basically, they take the position that most of the mold damage occurs due to the absence of regular and routine cleaning or care. If the mold is not the homeowner’s fault, then the insurance companies argue that it is often due to poor workmanship on the home’s structure, which occurred when the home was built or during renovation. Several in the industry believe that mold remediators have pushed mold claims in their efforts to make money from the repair work, and by that intervention have increased consumer’s fear of mold. Those same remediators as well as many professionals believe that certain types of mold may be toxic and cause serious respiratory problems, and even death in some cases. Others simply believe that no such scientific proof exists, but rather that discomfort from mold is usually due to some allergy only being aggravated or exacerbated. Oklahoma at the end of 2003 had 500 companies actively selling and providing home insurance policies. At year-end 2003, twelve companies out of these 500 had an all-inclusive exclusion rider that they claim prevents any benefits whatsoever on mold no matter the cause and no matter the damage. These exclusion riders began being submitted to the Oklahoma Insurance Department for approval in the year 2000. With the exception of the twelve companies with the all-inclusive exclusion, the remaining companies will pay for damage to your home from mold if, AND ONLY IF, that mold and subsequent damage results from a covered loss. You need examples ? Here are two. Companies will generally NOT provide any benefits for mold damage arising from leaks into your ductwork from cracks or fractures in your home’s foundation. Those cracks allow ground water to get into the ductwork. That moisture then can and will cause mold to grow. This would most likely be called poor workmanship. No benefits are ever available for that reason so this is a denied claim. On the other hand, most companies usually WILL cover a mold loss if it is the result of a broken pipe causing water to leak in your utility room from the water heater. This is a payable claim. Mold resulted from a covered peril. Remember however that the 12 companies mentioned earlier with the relatively new exclusionary rider will not cover the loss whatsoever. Prepare to hear some words and phrases that you have never heard before. Efficient proximate cause, efficient physical cause, metaphysical beginnings, predominant cause, covered peril, ensuing loss clause, untenantable and anticoncourrent causation clauses. These can be misunderstood and annoying and even cause someone a severe headache, but worst of all, very few of our industry’s treatises have chapters or descriptions on any of the above information. Material on this subject is very hard to come by. Mold has been mentioned in the Bible, which is a book of some age. Why has it become a big deal today ? A lawsuit in the State of Texas in the year 2001 against a major insurance carrier resulted in a $32 million award by a jury to the home’s owners. The reason for the lawsuit was mold and that mold made the home no longer livable. The claim was denied and the company was sued for bad faith – meaning the claim was denied for a reason that wasn’t justified or reasonable. Texas has had 40,000 insurance claims filed for mold or mold related reasons in the past 5 years. Famous people that we all associate with are having mold problems in their homes and because of their fame, have brought the subject to the front. Ted Nugent, Erin Brockovich, Ed McMahon and Sandra Bullock are just a few. A recent survey presenting questions and capturing answers uncovered the following statistics – What is your largest concern regarding mold in your home ? Health risk = 65% Repair expense = 31% Structural damage = 27% What would you do after you discovered mold in your home? Call a remediation expert = 56% Clean up the mold yourself = 34% Move away = 5% How’d the mold get into your home ? Excess moisture = 45% Humid climate = 15% Poor construction = 13% Leaking roof = 11% Burst or leaking pipe = 10% Water spill = 3% Don’t know = 3% Mold is found in your new home; what action would you take? Sue builder = 48% Wouldn’t Sue = 46% Don’t know – 6% Are there any preventive steps that you can take to prevent the risk of mold in your home ? Yes. Fix any water leak, reduce indoor humidity, clean and dry any damp furnishings, clean all hard surfaces with detergent and water, prevent condensation on cold surfaces by adding fiberglass insulation and get rid of carpeting in areas where moisture can be a problem. There also is a brand new product that is sprayed, rolled or painted onto surfaces primarily during construction on a new home. It can also be done to an existing home, but that requires that all the drywall be removed. Boards throughout the home are sprayed up to a height of 3 feet throughout all bathrooms, laundry rooms, all windows and outside doorways; all the normal spots that moisture appears easily. This may sound like a bulletin from a consumer group, but please know what your policy covers and what your insurance company’s stand on mold and mold damage is. Have any questions ? Contact your insurance agent or your insurance company. Maybe even the State Insurance Department at its offices in Tulsa or Oklahoma City. Tell them you need a clear description and some information of this new - - - - four letter word; MOLD.
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