It’s common that water losses produce mold if not properly remediated. Time and time again, you hear that mold, fungus or wet rot is a common exclusion in homeowners insurance policies. The question is simple- is mold covered or not? The simple answer is that in most policies mold that happens over time is not usually covered. However, in some instances, it may be argued that mold may be covered under an insurance policy when it is a result of a covered loss and is the result or proximate cause of the covered loss.

A good example of when mold may be covered is at the time of a plumbing loss such as a burst water pipe. Because a burst water pipe is a covered loss, any mold resulting is considered an ensuing loss and may be covered.

Some policies are expressly written with an "absolute" mold exclusion. An "absolute" exclusion means that no matter how the mold may come to be, the insurance company will not pay for the damages. Usually, the policy would have specific language indicating that under no circumstances would mold be covered under the policy. In the case of De Brun v. Superior Court,1 Farmers Insurance enforced its policy language and barred the insured from any recovery caused by mold. However, in De Brun, the Court also indicated that when policies have absolute exclusions, such language may be against public policy if the efficient proximate cause is rendered illusory.

When mold is a result of a covered loss, it is wise to check the policy and get a professional opinion on whether any mold exclusion is "absolute".

1 De Brun v. Sup. Ct. (2008) 158 Cal. App. 4th 1213.

  • Insurance Veteran

    As mold does not develop overnight it’s presence is usually the result of improper or neglected mitigation efforts. The exclusion appears to have been introduced to limit recovery as a result of the aforementioned. As mold is also a normal fact associated with certain climactic conditions it is not always the result of a covered peril. I agree that mold development from a covered peril should be entertained if the absolute exclusion is not present.

  • Scottie Davis

    Excellent Article! Can you expound on the definitions of Proximate Cause and Ensuing Loss?

  • gina roberts

    What about blistering lead paint. My home was flooded by a water main break. The insurance company said that lead paint removal, further demolition, and permit cost was not their responsibility. The paint is blistering from where the water line was and below. I have children under the age of six in the home. They told me that unless I could show case law that they are responsible that they will not cover that…

  • Insurance companies are clamping down in long term leaks and starting to deny coverage in cases where the leaks are over one week old.

  • yokeddruid1

    I could see if it were a long term leak. but to outright say no to paying on any mold damage even when damage like a tree falling on your house is bs