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Billion Dollar Mold Excluded from Policies

Homeowners in the path of Super Storm Sandy just started to feel like they were getting their lives back in order.  The debris had been cleared away.  Medical expenses were being covered or at least reimbursed. Personal property was being replaced and, for the lucky ones, families remained intact.  Then, months after the storm waters had receded, creeping white and green mold appeared where the waters had been. Mold is a billion dollar killer excluded from most insurance policies.

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Beyond compromising a house’s structure, medical experts say some types of mold can be toxic.  Insurers often exclude mold problems caused by flooding because they’re considered a maintenance issue, similar to preventing a termite infestation. According to the Insurance Information Institute,

“Standard homeowner’s policies provide coverage for disasters that are sudden and accidental. They are not designed to cover the cost of cleaning and maintaining a home. If, however, mold is the direct result of a covered peril such as a burst pipe, there could be coverage for the cost of eliminating the mold.”

This is profoundly NOT what the good people of the upper Mid-Atlantic needed to hear.  Nor is it good news for people who live in the flood plains of the Mississippi River Valley, the Delta region of the Southeast or in parts of the Pacific Northwest where floods occasionally occur.

Homeowners who believe that there is help on the way from the feds are out of luck.  Insurance through the National Flood Insurance Program (NFIP), administered by the Federal Emergency Management Agency (FEMA), will be of no help. The NFIP also doesn’t cover damages from mold.

Your friends at WiseInsuranceQuotes don’t like problems without solutions.  We didn’t find a magic bullet, but we found ideas.

Homeowners may need to buy a rider to their policies to ensure they’re fully protected from mold damage. “The costs vary according to the home’s location and the individual insurer, but $50,000 in protection will probably cost you an extra $47 a year,” says Bill Wilson, a spokesperson for the Independent Insurance Agents & Brokers of America.

Spending the extra money for mold coverage is much more prudent than the alternative which is closing your eyes, hoping it doesn’t happen to you and paying the freight if it does.  The cost of the freight is frightening!   Mold Edge, a mold-removal company working in Maryland and Virginia, quotes a small job at $200 to $600, with full remediation of a flooded home ranging from $10,000 to $30,000!

Ten to thirty grand.  That’s an idea that makes anyone cringe.

If your home has a water event, get rid of anything that is made of fabric, foam, or any porous material that came within a foot of the high water mark.  That means upholstery, wallpaper, floor and ceiling tiles, insulation, leather, wood, paper, food and clothing. Also remove cosmetics, stuffed animals, baby toys, pillows, foam-rubber items and books.  It will be hard to do, but the savings, and much more importantly, the health of your family may well depend on your ability to put nostalgia aside for the greater good.

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