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MOLD AND HOMEOWNERS INSURANCE
They has been a recent increase in the amount of homes
being taken over by mold. This causes occupants to be
sick and wreaks mayhem in the
homeowners insurance industry.
Mold has always been present. However, today's building
methods have made it worse. Specifically, homes are
built more airtight. As a result, any liquid that gets
in the house is trapped, permitting mold to grow -- and
making people sick that inhale it in.
Health issues of mold
The health risks of being exposed to mold are going to
vary from person to person and will depend on their
current health and how sensitive they are. The most
typical symptoms are comparable to other allergies or
hay fever.
You are more likely to feel the impact of mold if you are
susceptible to allergies or have respiratory problems or
a weakened immune system.
There are literally thousands of different types of mold
and it is everywhere. Any area where you combine water
and heat, you will have mold.
Indoors, mold is most commonly found in areas where
there is an accumulation of water, i.e. basements and
bathrooms. The most fundamental deterrence is that if
you smell it or see it, clean it up with watered down
bleach mixture.
The largest mold issues occur when there is any sort of
water issue, like a leaky pipe or cracked toilet. The
surrounding building areas will soak the water up and
never dry out. The only method for alleviating this
problem is to pull out the floors and walls and replace
them, which can be very costly.
Jon Daniels of Oakland Hills California is seeking more
than $20 million in damages as a result of toxic mold
that developed in their home after a pipe exploded and
flooded their den.
During the resulting clean up, the Daniels began to get
ill and their cat died, the suit says.
The Daniels are scarcely the only homeowners crying
foul. Mold is a tremendous insurance issue. Insurance
claim payouts and jury awards have included an $195
million jury award in California, a $5 million award in
Texas, and more than $120 million in mold-related
insurance claims -- in a single month -- in California.
Already, homeowners in California and Texas are facing
higher homeowners insurance premiums and even cancelled
policies. In addition, Texas' top homeowners insurance
providers recently declared that they would halt the
writing of all new policies as a result of the growth in
mold-related claims until they can begin utilizing an
alternate form that will leave out claims for damage
related to water.
Since homeowners are holding off writing new policies,
new home buyers who need proof of insurance in order to
obtain a
mortgage are having issues. Consumers have been
filing complaints with the
Texas Department of
Insurance that they are being held up on getting
their loans. As a result, the state's bankers
association is worried that this will push mortgage
interest rates higher as lenders have problems getting
national resellers to purchase Texas loans.
The biggest obstruction is that consumers are going to
have to be schooled in the differences in policy forms.
There also has to be shift in mindset. All homeowners
have had the Cadillac coverage, but will now have to
recognize that's no longer easily available. It will
still be accessible, but you will have to pay more money
for it.
Another matter that needs to be acknowledged is that the
losses have yet to stabilize, and the insurers are still
vague on how to foresee future losses. These losses keep
mounting every month. Companies are still unsure about
what to do with the pricing. It's unknown territory.
Anyone that has filed a claim related to water damage
within the last four years is going to find it difficult
obtaining homeowners insurance at any price. Not because
the house has mold, but it may.
Better construction equates to more mold
The construction techniques that have become typical
over the last two decades is one of the main reasons for
the recent increase in claims.
In the past, mold was not issue even though houses
leaked. This was because they were constructed in a
manner that permitted them to dry out after getting wet.
However, with the importance on building homes that are
more tightly sealed for energy efficiency, once water is
trapped inside, it takes a much longer time to dry.
Consequently, mold has a very strong opportunity to
form, especially if the builder attempted to save money
by using lower-cost materials for floors, roof decking,
and interior walls.
Keeping insurance costs down
You can keep your costs of homeowners insurance down
by taking out a plan with a higher deductible and/or get
a policy that does not offer water damage coverage. A
good idea would also be to analyze your plan to see if
there is any coverage that you do not need.
Be creative. That's the most important thing.
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