Insurance coverage is probably the most misunderstood and under utilized utility in a water damage situation. And if you have mold damage, it is even more confusing. Here, we will try to address some of the most common questions about insurance coverage for water and mold damage losses. (Please note: we are not insurance agents, adjusters, brokers, or consultants. This information is general and may not pertain to your specific situation. Please contact your insurance carrier for detailed information on your individual policy.)
“My washing machine supply line burst and flooded the first floor of my house. Will my insurance pay to dry the structure and replace damaged furniture?”
Yes. Your standard homeowner’s policy is designed to cover losses created by a single, onetime event such as a pipe bursting or a drain line backup. Even if you live in an apartment and the water originated from another unit, your homeowners policy will cover your loss. Once your claim has been paid, your insurance carrier will most likely subrogate against the insurance policy of the homeowner where the loss originated. This will reimburse your carrier for your payout, and eliminate the possibility of your premium increasing. In either case, you will be responsible for paying your deductible, at least initially.
“I have a big patch of mold growing on my bedroom ceiling, will insurance pay for it to be removed, and fix whatever caused the mold?”
Most likely, no. Due to extremely high payouts on mold damage claims in the late 1990?s and early 2000?s, mold damage has been excluded from standard insurance policies. However, it is always recommended that you contact your insurance carrier to come and take a look at the situation before making any judgements of your own. You may have coverage your weren’t aware of, or the loss may be caused by something that is covered, such as an acute roof leak. If the drywall on your ceiling is currently wet from a roof leak caused by heavy rains and wind, and thus has begun to grow mold, it is possible that your insurance policy will pay to replace the drywall and fix the roof. However, mold-related clean up such as containment, HEPA filtration, Personal Protective Equipment, and decontamination efforts may not be covered under the policy.
If you do want to have mold coverage for the future, you can purchase a mold rider to your policy for an additional premium. This offers coverage for mold-related damages to you home and personal property, to a certain extent. It is important that you read and understand exactly what the mold rider covers, because it does have its limits and you need to be aware of what those are.
“It rained very heavily last night, and water built up in my backyard and came into my living room. Now my carpet is soaking wet, and there’s silt and mud all over. What should I do, and will it be covered?”
First, call MD Cleaning and Restoration to respond to your loss and initiate mitigation efforts such as water extraction and decontamination cleaning. Depending on the size of the affected area and the damage sustained, these initial services should fall within $500-$1000, your average homeowners insurance policy deductible. Water that builds up outside and then enters your home is considered rising flood water, and could be highly contaminated. This initial response and decontamination is critical to maintaining health and safety in your home.
Now to the insurance. Depending on exactly what happened to cause water to rise and enter your home, you may or may not have coverage. Standard homeowners policies do not include damages from “flood water” as covered losses. You would need flood insurance to cover a loss like this. For those of you who live in State of Hawaii-designated “flood zones”, you are familiar with this type of coverage because you are essentially forced to purchase it. In the event you have already hired a professional, and you do not have insurance coverage, you have the option to stop the professional services at anytime, and handle the rest of the loss yourself. Since you have only paid about the amount you would have paid for your insurance deductible, you can feel comfortable that you have done the right thing to initially protect your family’s health and safety, and now you can move forward with your own efforts if you feel so inclined. Of course, we always recommend the use of a professionally trained and certified restoration contractor no matter if you have insurance coverage or not.
The flip-side to this type of loss is if it is caused by some sort of negligence or accident. Perhaps your neighbor built a wall recently and covered or changed the drainage pattern around your house, causing water to build up and then enter your living room. This may be a covered loss, something that your carrier will most likely pursue reimbursement for from your neighbor. Of course, if they deny any fault, and their insurance carrier doesn’t want to pay, this could unfortunately end up in some sort of litigation. If it was you who built the wall, this also may be covered by your policy. I would definitely expect your premium to rise from a loss caused by your own negligence, though.
“I live in a high-rise apartment building, and came home from work last night to find my apartment flooded and water dripping from my bathroom ceiling like rain. My resident manager told me the water came from a pipe in the wall that is the responsibility of the building. Do I still need to call my insurance carrier, or will the building handle this for me?”
This is a very common problem, and extremely important for homeowners of apartment units to understand. In most cases, common-area elements such as plumbing supply lines and sewer lines that run through walls and plumbing chases (areas you can’t see and don’t have access to) are the responsibility of the building, and part of your monthly maintenance fee goes to pay for the insurance policy for the building. In the event there is a water loss originating from a common-area element, the building’s insurance policy will pay for all damages to all the units affected by that loss. However, and this is most important, the unit owners that are affected by this loss, and receive payment from the building’s insurance carrier, are responsible for paying the building’s insurance policy deductible. The deductible for apartment buildings can range from $5,000 on the low end, to $50,000 on the high end. The percentage of this deductible that each unit owner is responsible for depends on the percentage of the insurance payout they received. This can amount to several thousand dollars per homeowner, and can be a major blow to the wallet for a water loss that wasn’t even caused by you.
The answer; purchase an HO6 homeowners insurance policy immediately if don’t already have one. In an event such as the one described above, your HO6 homeowners policy would pay for your portion of the building’s deductible, and you would only be responsible for your smaller homeowners policy deductible. This could mean thousands of dollars in savings for you, and a smooth restoration process.
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