Watch out.  Mold is lurking in your homes, in offices, in plants and factories.  Increasingly, it can be found in courtrooms too, as a wave of litigation spreads like wildfire across the country.

Mold comes in many forms, some harmless to humans and others harmful, though to what degree remains, in some cases, a source of controversy.  To many, it would seem as though mold was an invention of the 21st century.  Rather, it is the contagion of mold-related property and casualty claims and lawsuits that has spread across the U.S. much more rapidly than the mold itself, making for a costly epidemic for the insurance industry and for you.  For the uninitiated, here’s a mold primer…

Mold required three basic conditions to thrive – 1. Warmth (typically above 70 degrees fahrenheit), 2. A host environment (vinyl covered wallpaper, for example), and 3. moisture.  As might be expected, mold litigation similarly thrives in environments where higher temperatures are prevalent.  Texas has produced the largest single verdict to date ($32 million reduced to $4 million on appeal.), and more lawsuits than any other state.  Predictably, states like Florida, California, Hawaii, and Louisiana are not far behind.  However, warm climates are not the only culprits and even cold weather states are not immune to outbreaks.  Roy Harris, in a recent article in CFO magazine cites so-called “tight buildings”, in vogue since the energy crisis of the 1970’s as a source of the problem because their restricted air flow, while preventing mold intrusion from the outside, also prevents moisture release.

The spread of toxic mold lititgation, and the observations of the insurance industry pundits hailing mold as “the next asbestos” have inspired insurers to try to get a handle on the toxic mold issue.  Unfortunately, for clients seeking coverage for mold-related claims right now, the news is not good.  Insurers have filed exclusions for many homeowners’ and commercial policies to eliminate or drastically reduce the amount of coverage available for the exposure.  On the more promising side, insurers are slowly coming to grips with the coverage and if history is any indication, once there is a belief that the exposures can be adequately quantified, assessed and contained, coverage should broaden and prices will rise or sink to appropriate levels.  Naturally, the situation will vary from state to state and the coverage line, but if you are looking for coverage for mold right now, be prepared for expensive, but limited coverage.

What may delay the industry from fully assessing the exposure is the lack of cohesive data around mold as a source of claims activity.  Mold cuts across so many different insurance product lines, from workers’ compensation to professional liability, and insurer data doesn’t track the cause of claims across all these product lines.  The result is a bit of a black hole for underwriters and actuaries.

While claims against homeowners’ policies and commercial packages have been at the forefront, the issue affects realtors, property inspectors, appraisers, product manufacturers, architects and engineers, contractors, landlords, and a myriad of other types of businesses drawn in to the flood of litgation by plaintiffs.

It may take years to track the claims data in a meaningful fashion, and by then, the next “flavor of the month” in litigation may hit, and toxic mold fears may gradually or abruptly fade away.  In the mean time, risk management is the key, particularly in environments where mold flourishes.  Whether you are a homeowner, business owner, or both, it makes sense to moniter HVAC systems, including home air conditioning units for sources of moisture, invest in a dehumidifier if conditions warrant it, and take care to investigate and remediate any water damage quickly and thoroughly.  If it means ripping up carpets or replacing old, rusty pipes – do it.  It will be well worth the investment.  And last but not least, check with us to see what insurance options there are for your home and business.

A typical concern of people who buy homeowner’s insurance is protecting themselves from financial loss should the house burn down.  A much more common cause of damage to homes, though, is water.  Leaky roofs, broken pipes, and blocked drains canproduce a mess that is expensive and difficult to clean up and repair.  However, insurance coverage for these losses is not always certain.

The standard homeowner’s policy may cover rain damage, depending on how rain enters the home.  If a storm dmages the roof or a window and allows rain to enter, the policy should cover the cost of repairing the damage.  However, if the roof has no apparent damage but instead has suffered normal wear and tear, the policy will not cover the loss.

The policy will normally cover damage caused by water leaking from pipes, with some restrictions.  If a pipe breaks and floods a few rooms, the policy will cover the cost of repairs to the rooms but not the cost of replacing the pipe.  However, the policy will not cover the damage caused by a burst frozen pipe unless the homeowner has used reasonable care to either maintain the heat in the building or shut off the water supply and drain the pipes and appliances of water.  People who leave for warmer climates during the winter must make sure these steps are taken.

One lesson that many people learn the hard way is that homeowner’s policies do not cover damages casued by flooding.  The standard policy does not pay for damage caused by floods; water on the surface of the ground; waves; tides; overflows of bodies of water; or water spray whether the wind drives it or not.  It also will not pay for damage caused by water or floating debris that backs up into the home through sewers or drains or which overflows or discharges from a sump or sump pump.  Finally, it will not cover damage to structures such as driveways, sidewalks or foundations from water pressure under the ground.  A flood insurance policy from the National Flood Insurance Program may cover some of these types of losses.  Also, many insurance companies may offer a small amount of coverage for damage resulting from sewer, drain or sump backup for an additional premium.

When a water loss occurs, it is very important to stop the water flow and begin the drying process as soon as possible.  Broken windows and holes in roofs should be boarded up and water shut off to broken pipes.  If the water is allowed to acumulate, mold and mildew may grow in the area.  (Especially in the heat of the Summer!)  The longer the affected area remains wet, the longer and more expensive the repairs will be.

A good restoration contractor can help contain the damage and speed up the repairs.  He can perform emergency work, such as removing carpets, installing fans and dehumidifiers, and vacuuming up the water.  He will also protect furniture by setting it on blocks so that the legs are above the water.  Because the wet carpet pad may produce a foul odor, the contractor will remove and dispose of it and replace it with a new one.  This may save the carpet, thus holding down the total repair cost.

If you suffer a water-related loss, you should act quickly to limit the damage and protect undamaged property.  You should also notify us as soon as possible so that we can begin the claims process and get you in touch with a restoration company to begin the repair process.  After all it’s one thing to wash the kitchen floor with a bucket of water, but it’s a whole other show when a broken pipe coats it with 300 gallons of water!

Jeremy asked me this question the other day and with confidence I replied, “Yes, I would be.”  This led us to  discussion and research on this very topic so that we could correctly answer this question for our clients.  No one was more surprised than I when we discovered that this may not be the case.

Your neighbor would have to submit a claim under their homeowner’s policy to pay for any necessary repairs.  Wind and lightning are typically covered under Standard policies and included coverages under all-risk policies.  There is a chance that your neighbor could sue you to cover their deductible.

This doesn’t mean that you’re completely off the hook.  If the damage resulted from your negligence, you could be required to pay for the damage.  For example, if your tree was dying or already dead before it fell and you did nothing about it, you could be held liable.  In addition, if your neighbor files a lawsuit alleging negligence, your insurance carrier would be required to defend you and investigate the claim.

The best way to avoid this is to prevent it from happening.  If a tree looks unhealthy or dead, contact an arborist to check it and remove any dead spots or even remove the entire tree.  It used to be said that good fences make good neighbors, but now we can say that good, healthy trees can make happy neighbors.

For many generations, parents cringed at the thought of adding teenage drivers to their auto policies because of the cost associated with youthful drivers.  In the age of electronics, we can now add the use of computors to the list of parenting woes.  Parents not only need to be vigilant about who their children are talking to, but also what they are saying.  Facebook, Twitter, etc. are common modes of communication and unflattering posts about someone can not only generate electronic chatter among the readers, but they can also result in significant financial loss to your household.

It was recently reported in the news that a teenager from Oceanside, New York sued Facebook, four of her classmates, and their parents for $3 million.  The suit accused the four classmates of bullying and humiliating her in a forum on Facebook.  They allegedly posted derogatoryand false statements about her that were intended to hold her up to “public hatred, ridicule, and disgrace.”  Even if these allegations are false, the parents will require legal defense and resources to pay any judgement that may be awarded.  This leads to the question of whether or not their homeowner’s policy will respond.

A standard policy will only pay for damages that the policyholder (insured) is legally liable for , plus the cost of  legal defense, for bodily injury or property damage done to someone else and probably will not provide coverage for this.  The policy defines bodily injury as meaning bodily harm, sickness, or disease; property damage is defined as injury to, destructionof, or loss of use to physical property.  Libel and slander are not covered under this definition.  The girl from Oceanside accused her classmates of making her life miserable not that they physically injured her or made her sick. There is a high probablity that there is no coverage for this which exposes the personal assets of the family in the event that the court rules in favor of the plaintiff and awards damages.

The good news is that many of the carriers that we represent offer special personal injury coverage on your homeowner’s policy.  This  should cover you for liability resulting from oral or written publication of material that violates someone’s privacy.  As insurance agents we always try to make sure our clients have the appropriate coverages, but there is no way to predict how a court will interpret policy language or assign legal responsibility.  For the sake of the parents of the Oceanside classmates, we hope that they had a policy with the proper endorsements.

In our opinion, the best line of defense for our clients is the personal umbrella policy.  The umbrella policy provides an additional layer of coverage over your home and auto policies in the event that a claim exhausts policy limits and it covers a broader spectrum of liability exposures such as the Facebook example being referenced.  There are usually deductibles of $500 or $1,000 and the average cost of this coverage ranges from $125 to $200.  I don’t know about you, but that fits into my budget a lot better than the thousands of dollars in defense costs and judgements that could be awarded for an auto accident, unfavorable Facebook posting, or even a party gone awry!

We know that it is impossible to watch your kids every minute, but allow us to give you some peace of mind that when kids are kids you have the best protection in place to secure the assets that you have worked so hard for.  Call us, email us, or stop by for a quick quote on this vital line of coverage for your family.  We look forward to hearing from you soon!

If you think it really doesn’t matter where you buy your insurance you may be losing more than you think.
You could be losing money, service and protection. Buying insurance isn’t like buying bread or milk. Insurance is an important safety net for your family, your home, your car or your business.

At Independent Insurance Associates, we are driven to provide our customers with the guidance, expertise, and caring to navigate the world of insurance. Our wide array of insurance products enables us to provide our customers with more options when selecting a strategy specific to each client.