A very common question we are asked by our customers is if their insurance will cover the cost of the mold removal. Sadly, more often than not, the answer is no. They are usually very surprised and upset and we then discuss why most insurance companies don’t cover mold. So, why isn’t mold covered by insurance companies? For that answer you need to trace the history of mold and insurance companies…
Since Melinda Ballard was awarded $32.6 million after taking her insurance company to court, mold litigation has skyrocketed. Insurance companies are often portrayed as the villain: the big corporation trying to cheat the small home owner out of their claims with an army of lawyers at their command. But other times, the insurance companies are the victim by fraudulent building owners or mold remediators attempting to scam their large insurance companies with false or exaggerated claims. The truth is not black and white, and insurance companies are often on both sides of the moral spectrum; sometimes as the villain, sometimes as the victim.
Insurance Companies as Villains
The bottom line for insurance companies, as it is for any business, is to make money. Collecting home and flooding insurance payments from their clients is good for them, but awarding million dollar claims to these clients is bad for business. It’s the nature of the beast to look out for its own interests instead of yours. As villains, insurance companies will make the arguments that their coverage only includes flooding, but not the removal of mold as a result of flooding. Other times, the coverage is only applicable to mold if the flooding was caused naturally. Also, the coverage usually states specific requirements for the homeowner to take in order to mitigate the damage themselves or the claim will be denied. When multi-million dollar settlements are on the line, insurance companies will seek refuge in the technicalities and fine print.
Another villainous tactic insurance companies often use is poor, cheap remediation. Assuming your coverage does secure that the insurance company is responsible for removing your mold or repairing leaks, they may try to use cheap shortcuts to save money. This includes painting over the mold with an ineffective mildicide paint. They might use bleach to make the mold appear invisible while, at the same time, giving it water to grow. Also tenting your house and blasting it with massive amounts of ozone is a cheap but mostly ineffective mold remediation tactic.
Insurance Companies as Victims
While it’s easy to think of a cold, faceless corporation as the villain, some also see them as an entity to take advantage of. The science of mold, its causes and effects, are not always clear – which means a jury can often be convinced of a stretched truth or exaggeration. Also, mold is often the scapegoat when other factors may be the cause or, at least contribute, to negative health effects. Lawyers know that mold is gold; and with a sob story about a displaced family and pseudo-science, they can convince a jury to award a family millions more than they might deserve, as well as a tidy profit for themselves.
Mold inspectors can also be behind corrupt claims, working with home owners to scam insurance companies for a share of the settlement. They use tactics like “house cooking” – where they intentionally increase the amount of mold in your house – or by simply lying about your mold problem, to make your mold problem seem much worse than it really is. It’s very hard for insurance companies to detect this fraud if there is no reason to doubt the credibility of the mold inspectors. House cooking was used for many years to scam insurance companies in Texas before the courts finally realized what was happening.
The problem is that mold is far too tricky and unpredictable a phenomenon, while at the same time causes staggering financial losses. Mold is improperly dealt with in the beginning, and when millions of dollars are lost, both sides – insurers and their clients – look at the other side to take responsibility. Presumably, it is hard to remain unbiased when millions are on the line.
Whetherthe insurance companies are villains or victims, we have started working with them to educate them and discuss the problems mentioned above. Using our enzyme based approach to mold removal, we have found that many insurance companies are starting to “come around” because our cost is lower and we are much more efficient than other mold removal methods. Of course, our lifetime guarantee helps too…
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