- THE MAGAZINE
"More and more occurrences of mold are being reported in Florida," said Brian L'Hommedieu, CMR, president of MicrOscope, Inc., a mold remediation company based in Fort Myers, Fla. "Our business has doubled in the past year, mostly because people here are becoming more aware of what mold is--what it looks like, smells like--and the adverse effects it can have on their health."
Floridians' growing concern about mold is particularly evident in the upsurge of mold-related insurance claims in the Sunshine state. Filings have reportedly increased as much as 25 percent in the past year, according to Allstate Corporation. State Farm Insurance also reports a substantial climb in Florida's mold-related claims--citing 700 in 2001, compared to 83 in 2000.
Concerned about the volume and amount of the claims, 50 Florida insurance companies joined insurance firms elsewhere in the United States in asking state regulators late last year to limit their mold liability. To date, no legislative action has been taken on the petitions.
"We haven't approved any mold exclusion endorsements," said Steve Roddenberry, Deputy Director of the Florida Department of Insurance. Roddenberry added that the treasurer intends to hold hearings throughout Florida so that interested parties can present their positions on whether or not mold should receive insurance coverage, and under which circumstances.
Currently, most Florida insurance policies will cover mold damage only when it relates to what the Florida Department of Insurance deems a "covered peril," such as a hurricane or a windstorm.
"If mold results from a sudden, accidental charge of water, then its remediation is covered within policy limits," Roddenberry explained. "But if mold develops from construction defects or a homeowner's negligent maintenance, it's not the insurer's responsibility."
In other states, where mold cases are more rampant, state regulators are expanding the scope of mold coverage. In Texas, where the average mold claim runs around $17,000, insurance companies will be required to offer additional coverage for testing and treatment beyond normal water damage repair. This new coverage must be adopted by all Texas insurance companies by Jan. 1, 2003.
With mold coverage, consumers can expect higher insurance premiums. Projected increases may reach as high as 25 percent in some parts of the country. However, in states where mold exclusions are in effect, homeowner rates have actually dropped. But if California is any trend indicator, decreases are likely to be less than 10 percent.
"It's hard to know what to expect, because different states have chosen to handle the mold issue differently," L'Hommedieu said. "Despite hundreds of document cases where chronic respiratory ailments and other more serious symptoms have been linked to mold, not everyone agrees mold is a serious health threat. Even the EPA (U.S. Environmental Protection Agency) has publicly recognized uncontrolled mold growth as a health problem, but Congress still hasn't granted the EPA authority to regulate it."
States like California--overwhelmed with the second highest number of U.S. mold claims--have been compelled to address the issue legally. Late last year, California state legislators passed the Toxic Mold Protection Act, which outlines a mold disclosure obligation for property owners and sellers. This law requires disclosure when there is knowledge of, or reasonable cause to believe in, the presence of mold at health-endangering levels. This disclosure law will not be enforceable, however, until the California Department of Health Services develops permissible exposure limits for molds, which must be finalized by July 1, 2003. Other states, such as Michigan, are proposing similar mold disclosure legislation.
On the federal level, U.S. Rep. John Conyers, Jr., has proposed The United States Toxic Mold Safety and Protection Act, a bill requiring the divulgence of mold upon the sale of a home or other property transfer. Will Florida--a state known for its tourism and real estate--follow suit with its own mold disclosure law? According to Jeff Miloff, CSP, sales director/realtor of Miloff Aubuchon Realty of Cape Coral, Fla., the answer is "yes."
"It's only a matter of time," Miloff said. "Mold is a new problem facing builders, insurance companies and real estate professionals. As we learn more about its health hazards, we will see mold as a standard disclosure, just as we have with radon gas and lead-based paint."