Does Renters Insurance Cover Mold Damage?

The persistent musty smell can be an alarm that your home is infected with mold. The core question: When can your renter’s insurance policy offer protection, and when are you left with the bill? Well, the answer isn’t a straight yes or no. Each scenario has its outcomes for mold coverage. The type of policy, coverage limit, and cause of mold all work together to define whether the insurance provider pays for remediation or not. 

In short, mold often lies in the grey area of insurance policies. However, this post shares case scenarios that will help you understand whether insurance policyholders offer mold coverage or not.

The Norms of Renter Insurance Policies

Renters insurance coverages are designed to protect the personal belongings of renters. This mainly excludes property structure (dwelling coverage), which is the landlord’s responsibility. Here is what renters insurance covers, helping you better understand mold coverage.

Personal Property: 

Your content is covered under the tenant insurance policy. However, the coverage is only for covered perils with options for RCV (Replacement Cost Value) and ACV (Actual Cash Value). That means if your personal property is damaged due to a covered mold disaster, you will receive a reimbursement.  

Personal Liability Coverage:

Suppose someone faces a serious allergic reaction due to mold in your apartment and decides to sue you. Your insurance policy will kick in to pay for medical expenses and legal fees up to the coverage limit. 

Additional Living Expenses (ALE):

ALE is part of your policy, which will reimburse you if your rental place becomes uninhabitable due to a covered peril. Most of the renter policies are named peril policies. Clearly stating that only explicitly listed events are covered. Knowing what your policy coverage limits are is crucial for mold claims. 

When Renters Insurance Does Not Cover Mold Damage

Mold damage is preventable. There are just a few occurrences when it becomes accidental and unintentional. Typically, mold builds up due to negligence and grows gradually, not “suddenly and accidentally.” Here are a few common scenarios where mold is usually not covered:

Tenant Negligence: 

Mold due to ignorance is never entertained by insurers. It is considered more of a maintenance problem, which could be addressed in the initial steps.

Picture This: You hate cleaning the bathroom. Especially the shower. After a particularly rushed morning, you tossed your damp bath mat into the corner and left the shower curtain bunched up rather than spreading it out to dry. Days turned into a week, then two. The bathroom always felt a bit damp, but you dismissed it. One morning, an earthy smell hit you. Pulling back the curtain, you recoiled. A dark green, fuzzy patch had taken over the bottom, spreading onto the tiled wall where the curtain had rested, a direct consequence of your consistent oversight.

Will the insurer pay for this mess? Not a chance! You are on your own here. 

Landlord Negligence:

Even landlord negligence that directly damages your personal property isn’t covered by a renter’s insurance policy. It can be unaddressed structural issues, like a long-ignored leaky roof or faulty plumbing that finally gives way. Consequently, you can damage your furniture and electronics. As it was due to landlord negligence, you can’t claim it from your insurance provider. You will need to pursue compensation directly from your landlord. 

Gradual Damages:

Slow visible growth of mold isn’t generally a covered peril. However, if it’s the result of hidden leaks, that will be a separate case!

Excluded Perils:

Insurance policies offer two types of coverage: named peril and open peril coverage (all accident coverage, excluding named ones). For named perils, insurers only cover specific events. If mold is not a direct result of covered perils, your insurer will deny the claim. Most commonly:

• Flooding
• Sewer Backup/Drain Overflow
• Earthquakes
• Pest Infestation

They aren’t covered by tenant coverage policies. 

Pre-Existing Mold:

Pre-existing mold in a rental apartment is completely the landlord’s responsibility. It is suggested that you thoroughly inspect the place for any mold before moving in. Keep in mind that holding a landlord liable for pre-existing mold can strain your relationship if they refuse to pay. Further, the process of getting mold remediation from landlords can get quite bumpy. 

Structural Damage Caused by Mold:

Your tenant insurance policies only cover your content. Dwelling damage due to mold won’t be covered by the insurer. It can possibly kick in if your property owner decides to sue you for damage caused to the property. 

Mold Inspection and Testing Cost:

Mold inspection and testing costs also aren’t covered by tenant policies. Although it won’t cost a fortune, it is still the landlord’s responsibility. Potentially, there is an out-of-pocket expense for the tenant if the landlord is unresponsive.

When Renters Insurance May Cover Mold Damage (Exceptions)

Mold damage to your content may be covered if it’s directly a result of a covered peril. For instance, a burst pipe or fire. All you need to understand is the difference between sudden/accidental damages causing mold and slow/gradual damages breeding mold. 

What Constitutes “Sudden and Accidental” Water Damage?

A pipe leak hidden from plain sight, resulting in mold buildup, will likely be covered as it’s accidental. However, if the pipe leaks and it’s visibly keeping the wall and curtains damp for a longer period of time, it’s negligence. Insurance providers thoroughly inspect the situation before reimbursing you. So it’s better to file a claim only for sudden damages.

For instance, sudden and accidental discharge or overflow of water or steam from plumbing, heating, air conditioning systems, or appliances (e.g., burst pipe, washing machine hose burst, sudden AC unit leak, or water heater cracking/tearing/burning).  

In addition to that, accidental electrical current (damaging a covered appliance that then causes a sudden water leak/mold) is also covered.

Mold Directly Resulting from Covered Perils

Named peril coverage commonly includes:

• Fire and Lightning
• Windstorm and Hail
• Explosions
• Riots or Civil Commotion
• Damage by Aircraft or Vehicles (excluding your own car)
• Smoke Damage (from sudden, accidental fire)
• Theft and Vandalism
• Falling Objects (e.g., a tree falling on the roof, causing a sudden leak)
• Weight of Ice, Snow, or Sleet
• Volcanic Eruption

Case Scenario: Your home catches fire. The reason can be a neighbor’s house on fire, an accidental candle drop, or any other. As a result, you call firefighters, and rainwater is on your house, causing dampness to all your belongings. The mold buildup due to this will be covered, as tenant insurance policies cover fire (direct peril). 

Proactive Prevention After a Covered Peril

Whether the insurance provider pays for mold or not also depends on how you handled the situation. It is important to immediately call a professional mold remediation team after a significant covered water damage event. It’s easier to treat mold in the early stages than to remediate when a mold colony builds up. 

Furthermore, your insurer would be more likely to pay for early mold treatment, as it’s cheaper than dealing with a full-blown infestation. 

Important Limitations (Even When Covered)

Tenant insurance policies are designed for content coverage, personal liability, and ALE. It won’t cover building structures. The dwelling coverage is more of a landlord’s responsibility.

Personal Property Only:

For instance, if mold damages your luxury bag, the insurance company will bear the cost of replacement after you pay your deductible. However, if the wall or ceiling of your rental apartment is infested with mold, then it will not be covered by the insurance policy. 

Specific Mold Sub-limits/Caps: 

Insurance policies sometimes have a sub-limit for specific mold coverage. For example, insurance policies reimburse only $1,000 to $10,000 for remediation; the remains will be solely your headache. This is the ideal coverage amount per claim available for renter and homeowner insurance.

Black Mold vs. Other Mold: 

The type of mold, such as green fungus or dusty black mold, won’t affect the coverage limit. This information can be used to identify how old the mold is, such as size, growth, and color. Keep in mind that coverage only depends on the initial case of mold and the timeline of events.

Expanding Your Coverage with Mold Endorsements and Specialized Policies

According to This Old House data, professional mold treatment services cost  $3,500 for most homes. However, the size of the infected area matters a lot. The cost per square foot is between $10 and $30. That means small-area remediation equals a lower bill. 

Spoiler Alert: Extensive whole-house remediation can go up to $30,000.

With a normal insurance policy, you get a huge bill to pay alone. It is better to look for mold endorsements for your house. Especially if you live in a high-humidity area. Additionally, when looking for insurance riders, consider: 

Mold/Fungi Removal Endorsements:

Some insurers provide specific mold removal rider policies with much larger limits than usual insurance policies. You can choose from different endorsement coverage options. 

Typically ranging from $10,000 to $25,000 and $50,000. But bear in mind that the coverage comes with a price tag. The higher the coverage, the higher the premium. 

Quick Note: Fungus removal rider only covers remediation, possibly limited personal property damage coverage. 

Separate Flood Insurance: 

Flood isn’t a covered event (except internal flooding in some situations). Whether you have a renter’s insurance policy, landlord insurance, or any other property insurance. The possibility of having flood cover is near zero. As described, the possibility of mold treatment caused by a flood is also zero. You will need a specific renter’s insurance policy for it.  

Sewer Backup Endorsements: 

Sewer backup can also cause mold, damaging your personal property. Standard insurance policies don’t cover this type of damage or the mold caused by it. For an extra layer of protection, you can buy sewer backup endorsements. 

Additional Living Expenses (ALE) for Mold

Mold can cause severe health issues, such as breathing problems and extreme allergic reactions. It is unthinkable to live in a home infested by this greenish disaster. That’s where you can expect additional living expenses from your insurance company for mold. The only condition is mold, which should be a direct result of a covered peril that renders your rental unit unsafe or uninhabitable. 

ALE Claim Process:

To get ALE, you need a professional mold remediation company’s report confirming uninhabitability. Document everything, take pictures of infested areas, and attach the remediation company’s reports to claim extra living expenses. Please note that there is a cap on daily, weekly, and monthly expenses. So, before you book a luxury hotel and order a gourmet meal, note that there is a basic limit for these coverages, and you will be reimbursed for that. 

Landlord’s Responsibility vs. Tenant’s Role in Mold Management

Mold coverage isn’t solely the responsibility of renters’ insurance. It’s a shared domain with clear liabilities for both landlords and tenants.

Landlord’s Legal Obligation: 

Landlords are generally legally responsible for providing and maintaining a habitable living environment. This includes promptly addressing structural issues, pre-existing mold, and leaks that could lead to mold growth. 

Your Tenant Responsibilities:

As a tenant, you are also responsible for taking active care of the property. Damage to the structure due to mold negligence can cause serious legal issues for you. Here are proactive steps to prevent mold and legal liability. 

• Immediately report any plumbing leaks or moisture concerns to your landlord. Remember, wet materials drying within 24-48 hours prevent most mold.
• Use exhaust fans in bathrooms and kitchens, and ensure proper ventilation throughout your unit.
• Control indoor humidity, aiming for 30-50% with a dehumidifier, especially in basements or humid climates.
• Wipe down wet surfaces immediately, such as shower walls or condensation on windows.
• Clean and vacuum regularly, as dust is a primary food source for mold.
• Regularly check and clean the air conditioning and ventilation.

Documented Reporting to Landlord:

It is important to keep a detailed report of your water damage or mold report to the landlord. Here are some steps to describe the issue and protect you from a claim of negligence. 

• Report to the property owner always in writing.
• Use dated emails (certified mail or text messages).
• Include detailed descriptions (photos, videos with date/time stamps).

Furthermore, if your landlord doesn’t act after you’ve reported an issue, keep thorough records of all follow-up attempts. Failing to document the landlord’s unresponsiveness can quickly backfire by not informing the landlord about the issue. 

What to Do If You Discover Mold in Your Rental Property

It is understandable to get concerned about filing a claim when you discover mold. However, prioritizing health and safety is also crucial. Consider temporary relocation, as covered by your ALE, if the cause is a covered peril. 

With your health as the top priority, you can then turn your attention to thoroughly documenting the situation, a vital step for any further action:

• Document everything thoroughly, helping you file a claim more efficiently. 
• Consider a professional assessment. While the cost of mold inspection isn’t typically covered by tenant policies, it’s invaluable for insurance claims and landlord disputes.
• Once you decide to file a claim, prepare a detailed written statement of the incident.
• Obtain your claim number and the contact details for your claims adjuster.
• Do not dispose of damaged property prematurely. Your insurer may want to inspect it.
• Re-read your policy carefully, paying close attention to mold exclusions, limitations, and requirements for filing a claim. Remember sub-limits for mold remediation if applicable.

The Final Verdict:

It is always better to take proactive steps to avoid mold issues than to go through the claim process. There are multiple inclusions and exclusions in tenant insurance policies, making it tough to understand what is typically covered. The key is to understand that any issue or disaster directly caused by a covered peril will also be covered. 

Additionally, filing a claim and going through the inspection process can be time-consuming and a real headache. We recommend choosing a reputable insurance provider to process claims swiftly. If you are having trouble finding a reliable insurer, Smart Apple’s insurance broker can help you get the right coverage at the most affordable premiums.