Does Typical Landlord Insurance Cover Mold?

Mold. Just the mention of it can make some people feel uneasy. And for a good reason—mold can be a nasty, harmful intruder and cause extensive damage. 

If you own or operate a rental property, you know that there are plenty of things to worry about when it comes to keeping your rental clean and safe. One item that may not be at the top of your list is mold, but it's something that you should definitely be aware of.

In this post, we'll discuss what landlord insurance covers with regard to mold and what sort of damages it can help protect against. We'll also talk about some steps you can take to prevent mold from growing in your rental properties.

What is Landlord Insurance?

Before we dive deeper, here is a quick refresher on landlord insurance.  This type of insurance is specifically designed to protect rental owners from financial losses. Unlike homeowners insurance, which covers the dwelling itself and the homeowner's belongings, landlord insurance can cover both the property owner's investment in the property and liability claims from tenant occupancy.

Does Landlord Insurance Cover Mold?

Mold protection is a type of covered peril within an insurance policy. Sometimes it is included as standard, and other times it is available as an add-on to protect yourself financially in the event of mold exposure. While most rental property insurance policies do not cover mold growth, some will provide coverage for mold if it is caused by a covered event, such as a burst pipe or water leak.

For example, many insurance companies will cover the cost of mold contamination that develops as a result of water damage. This includes accidental discharge from a closed plumbing system. As long as you take reasonable steps to protect and repair the property after you discover the damage, your insurance company may cover the additional cost of remediating the mold contamination.

Landlord insurance policies may also cover a mold claim if a sudden or accidental event caused the growth, and the mold is hidden inside walls or ceilings, below floors, or above the ceilings of a structure. 

If you're unsure whether your policy covers mold, you can check the list of perils typically included in a rental property insurance policy. If mold is not listed as a covered peril, then it likely isn't covered under your policy. 

However, if you have an all-risk policy, then your policy may provide coverage for mold growth even if it's not specifically listed as a covered peril. All risk policies, such as DP3 policies, are typically more expensive than named peril policies like DP1, but they provide broader coverage.

Exceptions to Mold Coverage 

Most insurers do not cover mold damage caused by a construction defect, normal wear and tear, dry or wet rot, corrosion, pollution, deferred maintenance, or poor repairs. It's important to know that your insurance coverage may not include mold damage.

Here are three situations in which an insurance company may deny a claim for mold damage:

1. The mold is due to a tenant's negligence. For example, if a tenant doesn't properly ventilate a bathroom and mold starts to grow, your insurance company may deny the claim because the tenant's negligence caused the mold to grow.

2. The mold is due to a structural issue with the property. Let’s say there is a leak in the roof and mold starts to grow. Your insurance company may deny the claim because it was a pre-existing condition of the property that caused the mold to grow.

3. The mold is determined to be the result of flooding. In these cases, it's important to have separate flood damage insurance to cover any resulting property damage.

These are just a few examples of when an insurance company may deny a claim for mold damage. Be sure to understand your policy and what it covers so that you can be prepared in the event of mold growth in your rental property. If you have any questions, be sure to ask your insurance agent.

You can also search the Obie risk map to learn about the natural risks in your area, so you can take the proper steps to protect your property.

Tips for Preventing Mold in Your Rental Property

Mold thrives in warm, damp environments. If left unchecked, it can spread quickly and cause damage to both the property and the health of its occupants. While it can be difficult to completely eliminate all mold spores from a rental property, there are several steps that you can take to help prevent mold growth.

One of the most important things you can do is control moisture levels. Keeping the property well-ventilated and dry is important in preventing mold from growing or spreading. This can be accomplished by ensuring that proper drainage systems are in place and that any leaks are promptly repaired. In addition, you should encourage tenants to report any water damage as soon as it occurs.

Another way to prevent mold growth is to inspect the property, inside and out, regularly. Look for any signs of water damage, such as peeling paint or discolored walls, and address these issues immediately. In addition, be cognizant of any musty odors, which could indicate the presence of mold. Regular cleaning can also help to prevent mold growth by removing potential food sources, such as dust and dirt.

Finally, it is important to have a clear mold policy in place. This policy should explain what tenants should do if they suspect mold growth and outline the procedures for preventing, reporting, and remedying mold problems.

10 Steps to Prevent Mold Growth

Here are ten proactive measures you can take right away to help prevent mold in your rental property:

1. Inspect the property regularly for signs of moisture or water damage, and address any issues promptly.
2. Use a dehumidifier in areas of the rental property prone to dampness or excessive humidity.
3. Ensure that all plumbing fixtures and pipes are in good working order and free of leaks.
4. Ventilate moist or humid areas of the rental property, such as kitchens and bathrooms, to help prevent mold growth.
5. Ask tenants to regularly clean and disinfect surfaces in the rental property, especially those susceptible to mold growth, such as tile grout lines and shower stalls.
6. Immediately address any water leaks or spills, no matter how small, to help prevent mold growth.
7. Require tenants to store belongings off the floor in moisture-prone areas of the rental property, such as basements and crawl spaces, to help prevent mold growth.
8. Inspect windows and doors regularly for signs of leaks or drafts, and seal any gaps to help prevent moisture from entering the rental property.
9. Keep gutters and downspouts clean and clear of debris to help ensure that water can drain properly away from the rental property.
10. Use a high-quality air purifier with HEPA filters in the rental property to help remove mold spores and other airborne contaminants from indoor air.

How to Find a Landlord Insurance Policy with Mold Coverage

There are a few best practices to follow when shopping for a policy with mold coverage. 

• Be sure to get quotes from multiple insurers so that you can compare rates.
• Read the fine print carefully so that you understand what is and is not covered under your policy.
• Consider buying rental property insurance insurance online through Obie.

Purchasing landlord insurance through Obie is an easy and transparent process. More than $10 Billion in property is insured with Obie already, and coverage is available in all 50 states. To get started, enter your property address in our quote system and see the coverage you could be getting.