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Mold EDUCATION

:: INSURANCE CLAIMS

 

How to deal with an insurance claim, resources to provide to the insurance company about covering the proper coverage.

One of the first questions we’re usually asked is: “Will my insurance cover any of this?” It’s actually pretty difficult to answer, especially if we haven’t been to the home to evaluate. We can say that, generally, if the event is one your insurance company considers a “sudden and accidental occurrence,” then you’re entitled to coverage. 

The problem is what falls under the category of one of these events. Mold growth from lack of maintenance, poor construction design, and improper renovations will not be covered. These situations would be considered homeowner errors.

So what is a sudden and accidental occurrence?

It means that the cause of the mold problem has to be sudden and accidental. Examples of these events would be a massive storm or a burst pipe. 

That’s why it’s so important to routinely inspect your home so you can preventatively stop any potential problems before they start. 

Policies also include statutes of limitations that will prohibit coverage if too much time elapsed between the start of a problem and reporting a claim. An example of this situation would be not reporting a leak until a year later. 

With so many insurance policy qualifiers, it’s important to understand exactly what you’re covered for. Read below to learn how to set up your insurance preventatively so that you’re prepared if a mold event ever occurs to you. 

If I have a sudden and accidental occurrence, will they cover the claim?

This can be tricky because most policies have a limit per occurrence that they will cover. The main issue we come across is that individuals weren’t aware of the types of mold coverage when setting up a policy. Most companies will provide a base of $10,000 in mold and fungi coverage. If remediation costs rise above that amount (which they often do), you’ll be responsible for the remaining amount. 

The good news is that water damage and reconstruction costs are covered up to a separate policy limit. While you may not be reimbursed for the full cost of remediation, you will be reimbursed for the water damage (demolition and drying) and reconstructing portions of the project. 

My insurance company says your scope of work is outrageous, over the top, and unnecessary. I don't agree. What should I do?

As a customer, you should not have to justify this. Stand your ground and say that All American Restoration meets your remediation standards and it’s the insurance company’s responsibility to communicate with us and come to an agreement. It’s our job to justify the scope of the work and the required cost. 

We will always stand by our treatment protocol because it prioritizes our client’s best interests and not the insurance company’s need to cut costs. You can’t look at remediation from a dollar perspective. You have to come up with a comprehensive plan that eradicates all of the contamination from the event that led to the mold growth. And we’ll explain that to the insurance company using laboratory data to justify the cost. 

If they try to push you towards a “more reasonably prices” remediation company, you have to ask yourself why they’re cheaper. What corners are they cutting and what level of contaminates will be left behind?

My Insurance company wants me to use one of their preferred vendors but I don't think they are best equipped to handle the mold and my health. What do i do?

Unfortunately, many of the companies suggested by insurance companies are more knowledgeable about water damage than mold growth. Even if they have licensing to perform mold remediation. Make sure to keep in mind that you have the right to hire whoever you think is best for the job. 

Remember, you want to go with a company that prioritizes your health. A company like All American Restoration, for example, focuses on much more comprehensive remediation protocols because we want to make sure your home is safe and contaminate-free. Other companies may not include mycotoxins, endotoxins, or bacteria in their treatment plans. That leaves behind quite a bit of contamination that can cause adverse health reactions. Go with a team that makes sure the area is fully restored as if the problem never happened in the first place. 

WHAT HAPPENS IF MY INSURANCE COMPANY DENIES THE CLAIM EVEN THOUGH I THINK IT IS CLEARLY A SUDDEN AND ACCIDENTAL OCCURRENCE? WHAT CAN I DO?

Sometimes they deny the claim due to a professional’s recommendations. If they hire engineers who can’t figure out the source of the problem, they can’t accurately determine if it’s a sudden and accidental occurrence and will deny the claim. In cases like these, it might be best to start the work out of pocket. Hire someone to locate the source and provide proof that it was actually a covered loss. You can also hire an attorney, but they’ll usually need some sort of proof that you’re entitled to coverage. 

At All American Restoration, when we come to do a free estimate, our upfront opinion about whether or not we think your situation is a covered loss.

I HAVE A COVERED LOSS AND I’M APPROPRIATELY COVERED BUT THE INSURANCE COMPANY IS DENYING YOUR SCOPE OF WORK. WHAT ARE MY OPTIONS?

We’ve seen this time and again. The issue is that the scientific and medical communities disagree on whether biotoxins are a problem or not and if ERMI testing actually validates the need for more extensive work. In our opinion, that’s gambling with health. Medical research studies dating back to the 80s and 90s point towards mold and its byproducts causing adverse health reactions. However, when hundreds of millions of dollars were spent in toxic tort cases in the 90s, it created discontent and the CDC walked back their claims on how mold impacts our health. 

Today, the general consensus is that mold impacts “some people’s” health, particularly if they have pre-existing conditions or a mold allergy. This point of contention often turns the issue into a court battle where the parties argue on how much to spend to restore the area to its optimum air quality. 

Our suggestion is to put the insurance adjuster in touch with us, your mold hygienist, and your doctor so we can work as a team to explain how mold exposure could impact your health and the importance of eliminating all contamination from the site. If they’re still not willing to listen, ask for their supervisor. Then ask for the supervisor’s supervisor. Eventually, you’ll find someone who prioritizes your health and will be open to the conversation.

I HAD A COVERED LOSS AND MY INSURANCE COMPANY BROUGHT A NATIONAL WATER RESTORATION CONTRACTOR IN. THEY MADE A MESS AND NOW I FEEL AWFUL. WHAT DO I DO?

This actually happens fairly frequently. A national company will come in and start cutting open walls without proper engineering controls which exposes you to potential environmental contaminates. This is a dangerous practice and All American Restoration believes all treatments should be outfitted with engineering controls- you never know the extent of the damage or where the water came from. If the water comes from a drainpipe and passed through rodent droppings, it can contain contaminants like bacteria.  

We recently consulted for a woman who had a reputable company cut open the walls and install fans that blew dust and debris all over her medical facility. She ended up having hundreds of thousands of dollars in equipment exposed to environmental contaminates and her office was left in a mess. Now, the insurance company will have to spend much, much more than they would have if the project was done correctly the first time. 

If this happens to you, ask the company to leave immediately, document everything they did, and call your insurance company. You should also hire an environmental consultant of your choosing to test for bacteria and mold presence.

SHOULD I HIRE A PUBLIC ADJUSTER?

Their job is to represent you and adjust the claim to ensure you’re covered for the proper treatment, and they get a percentage of the payout you receive. A good public adjuster can be a great addition to a team to help settle a claim, but a bad adjuster can cause major problems. 

We’ve experienced clients with poor adjusters who told the client to settle for a lower amount and use a contractor of the adjuster’s choosing. The client agreed and after failing the post-tests, were forced to bring us in to redo the work after the claim was closed. That’s a lot of money out of pocket. 

When hiring a public adjuster, make sure they understand your goals, have worked with other individuals sensitive to mold exposure, and are willing to stand by you to make sure the entire scope of work is performed.

WHAT HAPPENS IF I NEED TO VACATE MY HOUSE? DOES MY INSURANCE COMPANY COVER MOVING OUT AND ADDITIONAL LIVING EXPENSES?

Your policy should include a “Loss of Use” coverage section. This will cover the costs of moving out and staying at another location until the project is complete. Make sure to look over this section before choosing a place to stay so you can find somewhere that fits within the budget. 

WHAT ABOUT MY CONTENTS? IF THEY’RE DAMAGED OR CONTAMINATED WHAT DO I DO?

A section of your policy should include a “Personal Property” section that gives you a budgeted amount to clean and/or replace your personal belongings. Depending on what caused the damage. Keep these two terms in mind: 

Replacement Cost Value: what it could cost to replace the belonging if you bought the exact same item or something comparable today  
Actual Cost Value: what the belonging is worth today when taking into account wear and tear and how long ago you purchased it 

Replacement Cost Value offers much more coverage. Understanding your coverage can help you plan on how to deal with your belongings. Check out our contents page for information on how to treat contaminated belongings. All American Restoration can help you determine what needs to be done with your belongings and can work with your insurance company to have a contents control team come in to evaluate what can be cleaned and what needs to be replaced.

If you have any further insurance-related questions not answered on this page, give us a call today!

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Licensed in Connecticut, New Jersey, New York, & Pennsylvania

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