Mold growth on bathroom wall and floor
|
|
|  |
|
|
Mold Happens
What to expect due to vast mold exposure
by Lauren Mayk
Mold, that moisture-loving nuisance, has crept its way into Florida homes, and it's making the insurance industry uncomfortable. So uncomfortable, in fact, that many companies simply don't want to deal with the fungus and the many structural and health problems it can cause.
The Florida Department of Insurance says 450 insurance companies, some of which are affiliated, have asked to limit or eliminate standard mold coverage since November. Insurance companies are crying poor, saying the number of mold-related claims has skyrocketed and they can't afford to pay them without greatly increasing premiums for all their customers.
|
"We want to make sure that we still have an insurance product to sell to people," said George Grawe, state counsel for Allstate Insurance.
In 2000, State Farm, the state's largest insurer, handled 90 mold claims, said State Farm spokesman Tom Hagerty. In 2001, the number of claims jumped to 337, he said.
It's difficult to compare those numbers to mold claims before 2000.
"Before 2000, we didn't even track mold claims specifically," Hagerty said.
State health officials have seen a 10 percent to 15 percent annual increase in the number of callers ringing their 800 number -- (800) 543-8279 -- with questions about mold and other indoor air quality issues.
So is Florida under attack by a new strain of mold?
Probably not.
There is little if any evidence that Florida's climate has spawned any more mold than in previous years. But with some high-profile cases in California -- including a claim by Ed McMahon that mold in his Los Angeles mansion killed his dog -- and a proliferation of claims in Texas, homeowners have become more aware of the issue and quicker to file a claim or a lawsuit.
"It's a new way of suing," said Michael Gilley, administrator for the state's clean indoor air programs. "It's a new twist on getting (mold) remediation done in a home."
Familiar to Florida
The skepticism of insurance and health experts about the sudden increase in mold claims does not mean that mold isn't growing in the Sunshine State.
To the contrary, mold has always flourished in the state's warm, moist climate.
Some cleanup and construction experts believe there may actually be more mold in Florida buildings in recent years because of construction practices and guidelines designed to produce tighter, more energy-efficient structures that don't allow as much air to circulate through them.
"I think there's more mold out there," said Greg Firth, head of marketing for Fireservice Disaster Kleenup. "All mold needs is a little moisture and a little something to grow on, and bingo -- you've got a mold problem."
The Fort Myers company, which has an office in North Port, has sent several employees to classes on mold and established a special team to handle mold jobs, now 20 percent to 30 percent of its business.
In Florida, mold damage is covered by standard insurance policies only if it is a result of a sudden escape of water, such as the blast from a burst pipe. Leaking faucets or broken air conditioners left unattended by homeowners and blamed for mold growth are not acceptable claims.
Sarasota resident Victoria M. King said she was told by insurance adjusters that her mold claim was one of the first they'd seen in the state. That was in September, before the flood of claims began.
Wind-driven rains from Tropical Storm Gabrielle pummeled her 4,000-square-foot home last fall. Water cascaded through the living room ceiling, flooding the room and soaking the walls and the carpet, she said.
King, whose sister had experienced health problems after mold began growing in her Manatee County home, did not wait long when she saw small black dots on a wall where wet carpet had been leaning.
She hired a microbiologist from Lakeland, who told her she had Stachybotrys charturum growing in her home and gave her some disturbing advice. "He said, 'You need to leave this house now. Take nothing but the clothes on your back,'" said King, a real estate broker. She left her McKinley Drive home by Oct. 1, and hasn't lived there since.
Today, King's property still looks like the quintessential Sarasota paradise. A red-bricked driveway at the end of McKinley leads you to a glorious view of the water. But the view is one of the only things that has remained the same. All her furniture has been removed and is being held in warehouses, where it is separated into piles of nonsalvageable (cloth couch cushions) and salvageable (nonporous materials such as marble or glass). The clothes are gone. Her fur coat can be cleaned but the lining must be replaced. The tile in the entryway abruptly stops where the peach carpet used to be. Overhead duct work is exposed. The bamboo wallpaper in her office, where a great mass of mold was discovered behind a window bench, has been stripped away.
The house, originally built in 1955, looks about like it did shortly after she bought it in 1973, when she tore much of it down and built it back up to her liking, King said. It would cost about $700,000 to rebuild from the ground up, but will be less with most of the structure still standing, she said.
King, who is covered by the Florida Windstorm Underwriting Association, has no complaints thus far about how her claim is being handled.
Her main concern has been eliminating the mold as quickly and effectively as possible to mitigate any health risks for herself and her four grandchildren when they visit. A settlement is still under discussion, but she has received some money for living expenses.
Mold's impact spreads
If mold claims are now a trend, they're a trend likely to have a lasting effect on a number of industries.
Insurance agents and attorneys are watching the issue carefully, of course, but so are builders, property managers, real estate agents and disaster cleanup experts. "Right now, it's just sort of like open season on us and the insurance industry," said Doug Buck, director of governmental affairs for the Florida Homebuilders Association. Buck said he knows some builders who have bought back houses they built after the new owners complained they found mold. In such a litigious society, builders are very concerned about protecting their reputations, he said. Sometimes it's easier to take back the structure than risk a lawsuit, he said.
Some property managers are adopting the same play-it-safe attitude. Joyce Klingle, owner of Charlotte County's Elite Property Management and president of the Florida Association of Residential Property Managers, said some managers are opting to let tenants out of their leases rather than risk mold-related lawsuits by tenants claiming health problems.
Elite has also attached an addendum to new leases that requires tenants to promise they will do their part by turning off water spouts, mopping up spills and taking other practical mold-prevention steps. If some insurance companies get their way, builders and contractors could lose some of their financial support in fighting mold-related lawsuits. Some insurance players want to eliminate mold coverage from the commercial general liability policies they write to cover builders.
The possibility of class-action lawsuits from the residents of condominium or apartment complexes frightens insurance companies the same way a rash of mold claims concerns residential insurers such as Allstate, said William Stander, government affairs representative for the Alliance of American Insurers, a trade organization representing about 320 companies nationwide. "We know we're going to be seeing the same kind of escalation here," Stander said.
If the state insurance department does not approve proposals to exclude mold from these so-called "builder's risk" policies, some companies may be forced to stop writing them. Builders need the policies to get their state licenses.
The insurance department has held three hearings on the mold issue around the state, including one near Tampa last month. Insurance company representatives, armed with Powerpoint presentations and statistics, squeezed shoulder to shoulder with emotional homeowners and interested mold remediators in the packed City Council chambers. Insurance Commissioner Tom Gallagher decided it was necessary to venture out into the state to take a closer look at the issue as filings from companies started piling up in Tallahassee, said spokeswoman Tami Torres.
State Farm asked for permission to raise homeowners rates 6 percent in 2001, 14 percent in January 2002 and another 22 percent in May. The department approved the first two increases, but rejected the third, Torres said. In June, the company announced it would not write any new homeowner policies. State Farm has proposed a set of policies that would exclude mold from its base homeowner policy and allow policyholders to purchase additional coverage of $25,000, $50,000 or the full value of the home. The insurance department rejected those proposals, saying they were too ambiguous. State Farm will continue to pursue the exclusions, said Vince Rio, State Farm's Florida counsel.
What many policyholders don't understand, insurance experts say, is that their premiums are based on historical information. If insurance companies have to pay more claims, they may also have to raise rates. "It's true that it's covered now," Allstate's Grawe said about mold. "But we've never had to pay those losses before."
[PRINTER FRIENDLY VERSION]
|
|
| |
|
|
|
