Does Homeowners Insurance Cover Mold?

Homeowners insurance is designed to cover you against various types of damage, but whether or not the policy insures against mold is not always clear-cut. Typically, mold is covered if caused by a covered risk or event.

“Generally, standard homeowners insurance policies can cover mold to an extent,” says Sean Harper, CEO and co-founder of Kin, a Chicago-based insurtech startup. “It depends on what caused the mold.”

Here’s a look at the most common situations in which homeowners insurance may or may not cover mold.

Mold Caused by Covered Perils

Homeowners insurance policies spell out a list of "covered perils." meaning instances of damage to the home for which you’re eligible to file a claim. The leading cause of mold formation is water seeping into the structure of your home, so you need to know which water-related covered perils are included in your policy.

For example, your policy may cover you if mold results from any of the following:

• Water leaks associated with a malfunctioning appliance
• Water damage caused by a burst hot water heater
• Water damage caused by firefighters extinguishing a fire in your home

In these instances, mold would be “resulting damage” from a covered peril. It’s important to distinguish between resulting damage and initial damage. For example, if your water heater breaks and a leak causes mold to form in the walls, then your policy might pay for the walls to be repaired and the mold to be removed but not for replacing the hot water heater.

If you have a mortgage loan, your mortgage lender will likely require you to buy a homeowners insurance policy. It’s important to review the policy details to determine whether the insurer will pay for mold repair and removal and the resulting damage to the home.

“This extent of mold coverage is typically limited—for example, a company may cap mold removal and remediation at $10,000 for a single occurrence,” says Pat Howard, homeowners insurance expert at Policygenius. Higher coverage limits may be available, but if you’re unsure about what’s covered, Howard suggests talking to your agent to explore your options.

Mold Caused by Floods or Acts of Nature

In some cases, mold can grow due to water damage from outside forces. Whether your homeowners insurance covers mold in that instance depends on what caused the damage.

“Mold that’s a result of storm surges, like floodwaters, is usually not covered by standard homeowners insurance,” Harper says. “That’s because standard home insurance policies don’t cover flood damage—you need flood insurance for that.”

If you have a flood insurance policy and your home is flooded due to heavy rains, a hurricane, or another act of nature, your policy may extend to mold removal and repairs necessitated by flooding. Flood insurance costs on average nearly $700 per year in addition to your regular homeowners insurance premium, though it may cost more if you live in an area at higher risk for flooding.

However, flood insurance might be worth the investment if you’re concerned about mold resulting from a flood. According to the Federal Emergency Management Agency (FEMA), just one inch of water in your home can cause $25,000 in damage. Flood insurance with mold coverage could help mitigate some of that cost.

Mold resulting from other acts of nature, such as a hurricane or an ice storm, may be covered under your homeowners insurance policy. For instance, if a hurricane tears your roof off and water gets inside the home, causing mold to grow, you might be able to file a claim for the mold along with other damages to the home.

Mold Resulting From Negligence

The third category of mold-related damage is associated with negligence on the part of the homeowner, meaning ignoring home maintenance or repairs, which causes mold to develop. “Mold typically isn’t covered by your homeowners insurance policy if it forms because of neglect or lack of upkeep,” Howard says. “If you knowingly could have prevented the mold by fixing leaky pipes or using a dehumidifier, your insurer won’t reimburse you for mold removal and remediation.”

Say you notice the seal around the base of your toilet is leaking water. Instead of replacing the seal or the toilet, you let the leak continue, which damages the subflooring. From there, mold sets in and spreads to the baseboards and walls. In that instance, your homeowners insurance policy claim may be denied because you were in a position to prevent the mold from happening.

How to Avoid Having a Mold Damage Claim Denied

You can do several things to prevent mold or improve the odds of having your claim approved if you incur mold damage.

On the prevention side, you can:

• Install dehumidifiers in areas that are prone to dampness
• Regularly check plumbing pipes and fittings to look for leaks
• Adequately ventilate bathrooms, laundry rooms, kitchens, and other areas of your home where mold may have an opportunity to grow
• Keep gutters clean to prevent the formation of ice dams, which can lead to leaks
• Regularly inspect your roof—and around windows and doors—and caulk cracks that could allow water to leak in
• Properly insulate interior and exterior pipes in winter to avoid breakages or leaks
• Routinely check appliances and water heaters for signs of leaks

If you have to file a claim for mold damage:

• Properly document the damage with photos or video
• Provide up-to-date maintenance records if you have them
• Follow any instructions the insurance company gives you to process the claim
• Contract approved mold removal companies to clean up the damage

What to Do If Your Mold Claim Is Denied

If your homeowners insurance company denies your mold claim, you may want to get a licensed contractor to offer a second opinion on what caused the damage. You could also attempt to appeal the denial with your insurance company if it has a specified appeals process. If not, your state insurance commissioner may be able to offer help with what you can do to get the claim approved or file a complaint about denial.

Frequently Asked Questions (FAQs)

The Bottom Line

Homeowners insurance is designed to cover sudden events. Typically, mold is covered if caused by a covered peril like water damage from a burst pipe. However, mold caused by a flood would not be covered under your homeowners insurance policy. Also, most policies do not cover mold due to gradual water leaks.