Jean: “It doesn’t rain in my living room. I know that sounds silly. I mean, how could it? I have a two-story house and a brand new roof. But with all of the uncertainties in life, I take comfort in counting (and counting on) simple blessings like this.

At least, I did until the day that I walked in to find water dripping from my ceiling. I ran upstairs to find that my washing machine had flooded and created major water damage to our second floor, as well as to the ceiling below.

 Inconvenient? Yes. A major crisis? No. I mean, that’s what I pay all of those obscene homeowners insurance premiums for, right?

Unfortunately, getting my insurance company to cover the cost of getting my home back to normal wasn’t as easy as you might expect. And when it came to getting them to cover the mold that resulted from their approved contractor doing a subpar job on the repair? Forget about it.”

 Janet’s problem wasn’t quite so obvious:

 Her jacuzzi tub had a leak that Janet didn’t know about for a period of time. The master bath, closet and bedroom were ruined by water and mold damage to the floor/subflooring. Her insurance company offered only $6,100, which didn’t cover the cost of the repair.

 Don’t get taken advantage of like Jean and Janet did.

Follow this step-by-step guide to maximize your chance of the insurance company fully covering your mold claim.

We’ll cover:

• What to Do When You Find Mold
• The Mold Insurance Claim Process
• Mold Remediation
• Getting Paid

According to the Insurance Information Institute, Jean and Janet aren’t the only ones who will deal with water/mold damage this year. In fact, according to the charts below, about 1 in 50 homeowners will file an insurance claim for water damage. Mold falls into the loss category “water damage and freezing.”

For these homeowners with water/mold damage, the average claim value is $8,861, as illustrated below.

Here are the most common sources of water damage (and potential causes of mold):

• Ceiling leak
• Air conditioning waste line back-up
• Flooding
• Broken pipe in the bathroom
• Kitchen sink leak
• Hurricane damage
• Sewer flooding

Step Number 1 to fixing your problem: STOP THE LEAK!!!

Step Number 2: dry the area to prevent any (more) mold from growing.

 Step Number 3: Tell your insurance provider.

If it’s outside of normal business hours and you can’t reach your agent or someone on a 24-hour emergency number, try to contact the company via e-mail, so there’s a record of your attempt to contact them as early as possible. This is important because not contacting the company in an undefined “timely manner” is one of the causes for many claims being denied. Side note: it’s not a bad idea to get all of your communication with the insurance company in writing (e-mailed copies of conversations, etc…), in the event of a dispute over your claim.

If the amount of water is serious enough that it’s going to take more than a few towels and fans to dry out, even if you can’t reach the insurance company, it’s generally acceptable to contact an emergency restoration company to get it taken care of (as long as they’re willing to work with your insurer). Check your insurer’s website to see if they provide a list of approved vendors.

It’s never a bad idea to go into the claim process armed with as much knowledge as possible (kudos to you for reading this article. You’re already a step ahead.). An ISO mold limitation for homeowners insurance coverage allows insurers to exclude mold coverage in every state except Arkansas, New York, North Carolina and Virginia, unless the condition results from what they deem to be a “covered peril.” To see what’s covered, take a look at your homeowners policy, especially the Conditions section. Pay particular attention to any potential gray areas with undefined terms. Common issues you’ll run into are things like “prompt notice” and “reasonable and necessary repairs.” Ask your insurance company to define all of these for you. As you comply with their definitions (which you’re getting in writing) you’re mounting up evidence for the claim to be decided in your favor.

According to one of the largest homeowners insurance providers in the U.S., the claim process generally works like this:

1. Report

• File a Claim
• Make a detailed inventory of damaged property

2. Review

• The Insurance Company will
  • Review claim details
  • Request an inventory of property damage
    • Photos
    • Brand names
    • Model numbers
    • Age
    • Purchase price
    • Place of purchase
    • Other information may be needed
  • Assess damage
  • Explain your coverages and endorsements
  • Discuss next steps
  • Provide advance payments if applicable
  • (for additional living expenses, for example)

3. Estimate + Repair

• Work with your claim associate to estimate repairs (your contractor can also give an estimate)
• Review estimate and authorize repairs
• Keep receipts for temporary repairs, additional living expenses, and other claim-related costs

4. Payment

• Receive payments based on the terms of your policy (less deductibles)
• Set up direct deposit to your bank account or get a check by mail

Something to keep in mind:

The insurance adjuster/claim associate works for the insurance company. It is his job to limit the company’s liability and the amount the company has to pay for your repairs. There is such a thing as a public adjuster whose job is to represent you, but often for these guys to impact the amount settled for, they have to call lawyers. Do yourself a favor: cut out the middleman (and his fee) and hire yourself a lawyer with experience in water/mold damage insurance claims.

Above on step 3, where it says “Work with your claim associate to estimate repairs (your contractor can also give an estimate)”, I’d word it a little differently: get an estimate from your contractor. He’s going to be the one performing the repairs and sending you the bill, after all. If his number is over what your claim associate has estimated, you don’t want to get stuck for the difference.

Then review the estimate, authorize repairs, and get it fixed, so you can get back to your life.

Pay attention to the note that says “Keep receipts for temporary repairs, additional living expenses, and other claim-related costs.” This is pretty self-explanatory and goes back to getting everything in writing. If there’s a dispute, it never hurts to have the numbers there in black and white ready to back you up.

• Receive payments based on the terms of your policy (less deductibles)
• Set up direct deposit to your bank account or get a check by mail

It’s not always this straightforward, however. Your payment may come in multiple installments. The first check may be an advance against the total settlement amount to use as a deposit for getting repairs underway. The second installment often comes after the work is halfway done. When your contractor tells you they’re over halfway and ready for the next payment, contact the mortgage company and let them know you’re ready for what’s called a “loss draft inspection.” Make sure the inspector recognizes that the work is, in fact, over 50% complete, so the company cuts that check and the repairs can continue. You don’t want to be stuck waiting around while the work is half-finished.

Also note that the payments may be made out to both you and your lender/management company if you don’t own the home outright.

For more details on the payment process, check out this article by the Insurance Information Institute:

https://www.iii.org/article/understanding-the-insurance-claims-payment-process

If you have any questions about the mold insurance claim process, don’t hesitate to leave a comment. Remember, if you’ve got a mold problem, we’re here to help. Use our handy quote tool to fill out one simple form, get up to 3 competitive quotes, compare, and save.