They say the average person, unfortunately, has a tragic water event occur one in every ten years. Even if you follow our mold prevention guide, something such as a pipe break or a failed appliance could cause unwanted water damage to your home. For this reason, it’s important to make sure you have the proper coverage on your home or business insurance policy. By default, most people either have no coverage or a maximum of $10,000 per occurrence under mold and fungi. Unless you specifically knew to ask for more coverage, this is likely the case. When a sudden and accidental water damage occurrence happens, it could very easily get to be greater than $10,000 in mold remediation that would exceed your policy limit forcing you to pay the difference out of pocket.
For this reason, we recommend reviewing your insurance policy coverages to look for your independent coverages as we will outline below.
MOLD & FUNGI:
This is the specific allowance for mold and fungi removal. You’ll see a number next to “per occurrence” and another number next to “aggregate”. The aggregate is usually double the occurrence number and what aggregate means is the maximum coverage you’re allowed to have in one year. So if you have three water damage events occur in a one year period and the first two claims already took up the maximum aggregate, even though you have coverage per occurrence, you would only be covered up to the maximum aggregate. You’ll be pleased to know that this has no bearing on the cost of reconstruction as that is covered in a separate coverage on your policy. We recommend increasing your mold and fungi coverage to the absolute maximum they will give you so that you are properly covered in the event you have a water loss that leads to mold growth.
This coverage is the maximum coverage on your policy as it relates to your personal belongings. Let’s say you have a water leak and it ruins a $5,000 couch. This is what is the maximum coverage allowance to replace that couch among other things that could be damaged. It also covers the cost of cleaning anything that would need to be cleaned as a result of the damage. There are two terms that you want to pay attention to: Replacement cost value and Actual Cost Value. Replacement Cost Value means they would give you the money to replace that couch as if you bought that couch today. Actual Cost Value is based on an appraisal of what the couch is worth based on depreciation, wear and tear, etc. This means they may give you $2,500 for that $5,000 couch due to depreciation. Like any other category of coverage there is a maximum to what they will pay out in the event everything was totaled. It’s important to stay up to date on what your belongings are worth and ensure you have the proper coverage to replace items in the event you have a tragedy occur that damages your belongings.
LOSS OF USE:
This insurance coverage is similar to having a rental agreement on your car insurance. In the event you can no longer inhabit your home to do a covered loss, this coverage would kick in to allow for you to live in a temporary housing or hotel. If your max loss of use coverage is $25,000 then you would need to find a place to live for the duration of the restoration of your home within that budget. It’s worth looking this up on your policy and asking yourself in a worst case scenario if you had to live elsewhere for six months, would this cover enough for you to live a comparable lifestyle to what you have now. While not all restoration projects are six months, we always recommend having more coverage than you needed as opposed to less coverage when you do need it.
You have a separate section related to property damage that includes the water mitigation and reconstruction of your property. This is good news if you do have mold as you’ll have a separate allowance up to policy limit to first mitigate the chances of mold as well as reconstruction of the damaged space. Leaving the treatment and mold removal process covered separately up to your mold and fungi limit. This can help cover some costs when you have a smaller mold and fungi limit.
Keep in mind, the insurance company does not cover losses that are a result of a failure to maintain your home. Things like leaky faucets or toilets that were left not repaired for long periods of time will result in a denied claim. Other maintenance issues such as window and door leaks that did not occur during a major hurricane or storm. Finally, another common cause of mold is water seepage due to poor waterproofing implementations. These all are considered maintenance issues and unfortunately not covered as a sudden and accidental occurrence. It’s important to follow our tips for preventing mold guide here so you can do your part in maintaining your home properly to avoid water and mold damage from occurring in the first place.
It’s extremely important to note that if you have a current loss and you change your policy before notifying them of the loss, it would be considered insurance fraud. You should only change your insurance policy as a proactive measure to protect yourself from the future. There is no problem changing your policy after you’ve notified them of the loss but your new coverages would not apply to your current loss.
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