ADJUSTERS INTERNAT IONAL . COM 3 A D J U S T I N G T O D A Y Mold Is it covered? Is it excluded? Is it capped? Any time water enters a building there is a potential for mold, whether it comes from a windstorm or from a simple pipe break. Regardless of your insurance coverage, the first step to containing a mold problem is to completely remove all wet carpet, drywall, and contents, and dry out the site immediately after exposure. This will reduce the potential for serious mold development — which has been proven to be capable of producing toxic effects in humans and animals — and mitigate further damages. In recent years insurance carriers have expended extraordinary amounts of monies as a result of mold claims, and a majority of insurance policies have been rewritten to either include a mold exclusion or to cap the insurance available for mold remediation. At times, this cap is far below the true costs to remediate mold, so eliminating the potential for mold will help protect against an unexpected out-of-pocket expense. Code or Ordinance Coverage Do I have it? If so, is it enough? Over the years changes in your local building codes and ordinances have been enacted to reflect new standards for construction. If your older property suffers a substantial loss, fixing it may require higher construction standards. Simply replacing your property as it was may not be enough to meet these new laws and codes. Building ordinance or codes coverage, which pays to rebuild a structure Case Study: A major hurricane devastated parts of North Carolina on a Friday. An Ocean City mall was not spared, and major roof damage allowed water to soak a large percentage of the structure’s drywall, carpeting, and ceiling tiles. After a quick clean-up, the owner of the shopping center waited for guidance from his insurance company. By the time the insurance adjuster arrived, it was early afternoon on Tuesday. Both arrived to survey the damaged areas and found that mold had grown in the grocery store and four of the other occupied spaces on the premises. Because these areas had not been sufficiently cleaned and dried, the cost to remediate the mold was approximately $200,000. The insurance adjuster was quick to point out that there was a $15,000 cap for mold remediation in the policy. The additional $185,000 was to come out of the owner’s pocket. Case Study: A business in Tennessee purchased a policy for a metal warehouse in Florida. Hurricane Jeanne hit the warehouse, and the building was destroyed. The warehouse was insured for $1 million, but with enhanced structural beams and concrete foundations being a requirement of the local building department, the cost for reconstruction to code increased to $1.75 million. The policyholder did not have any code or ordinance coverage and, as a result, was required to fund the additional $750,000. Building ordinance or codes coverage, which pays to rebuild a structure to comply with current building codes, can be added to your policy.
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