In recent years, there has been an explosion in toxic mold lawsuits and it’s a trend that has insurance companies on the defensive. Large insurers such as State Farm and Allstate have either tried to cap the damages for mold claims or exclude coverage altogether. These attempts have generated a lot of negative publicity as well as sparked political debate in states such as California and Texas where mold lawsuits are the most common.
 
Insurance companies claim that they simply cannot afford to cover mold related claims. Citing the rising industry costs and the fact that homeowner and association policies have never been particularly profitable, insurance companies claim they cannot take the risk of a mold epidemic with as yet undefined health consequences. Most experts agree that mold can aggravate pre-existing respiratory conditions such as asthma, but there is less consensus as to whether mold can cause illness in an otherwise healthy person. Insurance companies cannot predict whether they will be required to cover settlements of monumental proportions such as those seen with the asbestos cases in the 1980's. Just last year a Texas jury awarded $32 million to a homeowner because the insurance company acted in bad faith and delayed repair of a plumbing leak resulting in mold. The case has been appealed, but might just be a sign of jury awards to come.
 
So just how great is the risk to your association? Toxic mold complaints are most common in Florida, California and Texas, but are also happening here in Colorado. The effects of mold are not fully defined, but may be very serious for children, the elderly, people with allergies or a sensitivity to mold and people with respiratory conditions. Further, the buildings within your association may be at risk because mold, a living fungus, feeds on its surroundings including your building materials.
 
The first step for every association is to speak with their insurer to find out the extent of their coverage. Insurers cannot remove mold coverage from your current policies even if they decide that all future policies will have a mold exception. However, insurance companies are trying to find arguments to avoid coverage under current policies. For example, insurance companies have argued that a general exclusion for “absolute pollution” includes toxic mold. Even without such an exclusion, an insurance company can argue that the mold in the building came from a source for which the insurance company is not responsible. If your insurance company is going to fight your mold related claims, you may want to consider your options before it becomes an issue including asking your insurance agent to find a policy specifically covering mold.
 
The second step is to prevent mold from becoming a problem. Most household molds are destroyed by regular cleaning which is why mold typically becomes dangerous only after it infests places no one usually cleans such as crawl spaces, insulation, drywall or carpet. Molds require a damp environment in order to survive so mold is frequently the result of moisture leaking into the building through a leaking roof, windows and doors that are not properly sealed, leaky or broken pipes, cracks in the building or flooding. Regular maintenance and inspections can reveal excessive moisture so that it can be thoroughly dried and treated before mold becomes a problem.
 
For additional information on toxic mold prevention and safety, visit www.toxic-mold-news.com/toxic_mold/prevent.html.