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Homeowners Insurance And Mold

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					In recent years people have become quite scared of the prospect of having mold in
their homes. Some home loans cannot even be approved if mold is detected on a
property, and there are a lot of horror stories floating around about homeowner’s
insurance policies refusing to pay out on mold claims and the high expense of
repairing mold damage once it sets in.
  Take for example the story of one young Northern California family who was in the
process of purchasing a new four bedroom, two-story home. The home had undergone
a foreclosure and was being sold by the bank, so it hadn’t been lived in for several
months. The couple fell in love with the house, put down a deposit, and began the
process of getting the home inspected for processing of the bank loan.
  Because the home was connected to city water, the home inspector called to have the
water turned on at the home. What the inspector didn’t know, however, was that
someone had left the faucet in the upstairs bathtub on with the drain stopper in place.
Two days later when the inspector arrived to look at the house, the water had flooded
the bathroom and run down the walls of the ground floor living room and dining room
below, soaking all of the carpet in the upstairs and downstairs. The drywall had
buckled and bubbled, collapsing under the weight of 48 hours of continuously running
water.
  The house sat for nearly a week before a claim was filed and cleanup work could
begin. Mold and water saturation had already crept in. The walls and carpeting were
torn up and workers dried out the house with industrial fans for weeks before finally
repairing the walls, carpeting, and repainting the interior of the house. The couple had
to walk away from the sale, even though all of this work had taken place at the bank’s
expense. Why? Because every mold expert they called told them there was no way to
completely get rid of the mold in a case like that, and it could return or get worse and
cause further problems down the road. Mold, while usually harmless, can still cause
structural damage and problems for people with breathing issues such as asthma or
allergies. It can also affect the future resale value of the home, as most disclosures
require you to report the presence of mold.
  Whether mold is covered by a homeowner’s insurance policy depends on the source
of the moisture and the wording of your policy. A separate mold rider can be
purchased, and usually costs around $500-$1500. If mold results from an accidental
situation that's already covered by your policy, such as a pipe bursting in the example
mentioned, the mold remediation cost should be covered. Flood damage is different
and covered by a separate policy, however.
  Most basic homeowner’s insurance policies exclude coverage for damage caused by
mold, fungi, and bacteria, but that doesn’t mean a mold claim will be automatically
denied. Claims will usually only be rejected if mold is caused by neglected home
maintenance on the part of the owner or situations such as long-term exposure to
humidity or repeated water leaks. Mold claims can be expensive for insurers, with the
average claim falling between $15,000 and $30,000, causing many states to adopt
limitations on mold coverage. Amounts vary, but a typical homeowner’s policy might
cover between $1,000 and $10,000 in mold remediation and repair. They only way to
make sure you are covered is to speak with your agent and go over your policy.
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