Does Homeowners Insurance Cover Mold?

Mold is a common issue in homes, but when it spreads unchecked, it can lead to structural damage and health risks. Mold remediation can cost thousands of dollars, leaving many homeowners frustrated when their insurance denies coverage.

The truth is, homeowners insurance only covers mold in certain situations, typically when it results from a covered peril like a sudden pipe burst. Long-term leaks, humidity, and flooding-related mold are usually excluded.

In my years of experience in the insurance industry, I’ve seen countless homeowners caught off guard by mold exclusions. In this article, I’ll explain when mold is covered, when it’s not, and how to protect yourself from costly surprises.

When Does Homeowners Insurance Cover Mold?

Discovering mold in your home can be stressful, but does your insurance cover the damage? The answer depends on the cause of the mold growth. Most homeowners insurance policies will cover mold damage if it results from a sudden and accidental water-related event.

Mold remediation is typically covered when caused by:

• Burst pipes – If a pipe suddenly bursts and mold develops, your policy will likely cover both the water damage and mold removal.
• Ice dams on the roof – If an ice dam causes a roof leak, leading to mold growth, insurance will usually cover it.
• Wind-driven rain – If storm-driven rain enters your home and leads to mold, it may be covered under a standard policy.
• Accidental appliance leaks – If a dishwasher or washing machine suddenly leaks, leading to mold, your claim may be approved.

When Doesn’t Homeowners Insurance Cover Mold?

While homeowners insurance covers mold in some cases, many claims get denied. If mold is caused by neglect, long-term leaks, or poor home maintenance, it is almost never covered.

Common Reasons Mold Damage Is Denied:

• Long-term moisture issues – Mold from humidity, condensation, or slow leaks over time is considered preventable by insurers.
• Poor maintenance – If you fail to fix leaks, ventilation problems, or clogged gutters, mold-related damage won’t be covered.
• Corrosion or deterioration – If an old, rusted pipe leaks over time, leading to mold, insurance will deny the claim.
• Defective materials or poor workmanship – If mold grows due to a construction defect, you may need to file a claim against the builder or contractor, not your insurer.
• Pollution-related mold – Mold caused by chemical exposure or industrial pollution is typically excluded from coverage.

Some policies exclude mold entirely – Certain insurers offer no mold coverage at all, meaning homeowners must purchase an endorsement or pay out of pocket for mold removal.

Does Homeowners Insurance Cover Mold From Floods?

No, mold caused by flooding is not covered under standard homeowners insurance. Since flood damage itself is excluded, any mold growth resulting from storm surges, river overflows, or heavy rains won’t be covered either.

However, flood insurance from the National Flood Insurance Program (NFIP) can help cover mold damage caused by floods. Even homeowners in low-risk flood zones should consider purchasing a policy, as flood claims increased by 156% in 2016, according to a LexisNexis Home Trends Report.

How Is Mold Caused?

Mold thrives in damp environments, and once it spreads, it can cause costly damage to your home. While small amounts of mold—like the kind found in bathrooms—are common and usually harmless, hidden moisture problems can lead to widespread mold growth behind walls, under floors, and in crawl spaces.

Mold needs humidity or water leaks to survive, and it can spread quickly if your home has:

• Leaky appliances – Dishwashers, washing machines, or refrigerators that drip over time.
• Roof or plumbing leaks – A slow leak from a roof, pipe, or water heater can cause mold behind walls.
• Poor ventilation – Steam from cooking, bathing, or laundry can raise humidity levels, leading to mold growth.
• Basement or crawl space flooding – If moisture isn’t removed immediately, mold can develop within 24-48 hours.

Mold Remediation Costs

Mold removal can be expensive, and many homeowners are surprised by the high cost of remediation. The Insurance Information Institute estimates that the average water damage claim costs $8,861, but mold remediation can cost anywhere from $1,500 to over $30,000, depending on severity.

Mold cleanup isn’t as simple as wiping down surfaces—it often requires:

• Professional testing to determine mold type and toxicity.
• HEPA-filtered fans and air movers to prevent spores from spreading.
• Air scrubbers to purify contaminated air.
• Biocides and antimicrobial treatments to eliminate mold at the source.

In severe cases, homeowners may need to relocate during remediation due to air contamination risks, adding additional costs for temporary housing.

Policy Limitations and Endorsements

Most homeowners insurance policies provide limited coverage for mold damage, usually between $1,000 and $5,000. Since mold remediation can cost tens of thousands of dollars, many homeowners choose to purchase additional coverage through endorsements.

Mold Coverage Endorsements

If your policy doesn’t include sufficient mold protection, some insurers offer a “Limited Fungi, Wet or Dry Rot, or Bacteria Coverage” endorsement. These increase your mold coverage limits, with options like:

• $5,000 (standard)
• $10,000, $25,000, or even $50,000 in some states

The cost of these endorsements ranges from $500 to $1,500 per year, depending on factors such as:

• Your location – Areas with high humidity (e.g., Texas, Florida, and California) have higher endorsement costs.
• Your home’s age – Newer homes have lower mold risks and may qualify for cheaper endorsements.
• Your home’s value – Luxury homes with expensive finishes require higher limits to cover restoration costs.

Standalone Mold Insurance

If your home insurance provider doesn’t offer a mold endorsement, you may need to purchase standalone mold coverage from specialty insurers. However, these policies can be expensive, and coverage varies widely by provider.

How to Prevent Mold

Whether your homeowners insurance covers mold or not, preventing mold growth is the best way to protect your home. Keeping humidity under control and maintaining your home’s plumbing system are key steps in mold prevention.

Control Humidity and Ventilation

According to the Insurance Risk Management Institute (IRMI), homeowners should:

• Keep humidity levels between 30% and 50% to discourage mold growth.
• Ventilate moisture-prone areas like bathrooms, attics, and crawl spaces.
• Use exhaust fans wherever heat or moisture builds up (kitchens, laundry rooms).
• Ensure proper insulation to reduce condensation in walls and ceilings.

Routine Maintenance Checklist

Perform regular home maintenance to catch leaks early:

• Inspect pipes, drain lines, and appliances for leaks—repair immediately.
• Clean gutters and downspouts to prevent water damage near the foundation.
• Turn off the main water valve when traveling to prevent leaks while away.
• Monitor your water bill for unexpected increases, which could indicate a hidden leak.

Insuring Your Home After a Mold Claim

Filing a mold claim can make it harder to get affordable homeowners insurance in the future. Insurers track past claims through a CLUE (Comprehensive Loss Underwriting Exchange) report, which records all insurance claims on your home for up to 7 years.

How a Mold Claim Affects Future Insurance

• Higher premiums – Insurers may increase your rates due to the risk of future mold issues.
• Higher deductibles – Some companies may still insure you but require a higher deductible for future mold claims.
• Policy non-renewal – In some cases, your insurer may choose not to renew your policy after a mold-related payout.

How to Protect Yourself After a Mold Claim

• Update your CLUE report – Add a note explaining that the mold issue has been fully resolved with professional remediation.
• Shop around – Some insurers are more lenient with past mold claims than others.
• Consider private insurers – If standard companies refuse coverage, specialty insurers may offer policies (though at a higher cost).