Mold Boosts Home Insurance Rates; Attack of Fungus Raises Damage Claims, Litigation fears.(PAGE ONE)

Article excerpt

Byline: Kristina Stefanova, THE WASHINGTON TIMES

Blame mold.

The spore-spreading fungus is causing a big increase in property-damage claims to insurance companies nationwide, sending insurance rates for homeowners and landlords through the roof.

Claims are piling up because of some recent large mold-related lawsuits and a strong residential real estate market, which resulted in fast but not always high-quality home construction. Premiums across the country have risen from 6 percent to 15 percent.

Like all forms of life, mold needs three basics to survive: water, a food source - anything organic, such as wood or cellulose insulation - and warm temperatures. So leaky water pipes and roofs, cracked foundations and overflowing washing machines encourage the spread of molds.

Sometimes mold is obvious, presenting itself on bathroom tiles or as a spot on a carpet. Insurance doesn't cover such repairs, because they are considered home maintenance.

But there are times when a home becomes smelly, and the residents don't know why. After testing air samples, an environmental company may find there is a mold infestation. Insurance covers the cost of the repair if the owner could not have prevented the problem.

"The process [of killing and cleaning up mold] can take anywhere from a few days to a few weeks it's pretty disruptive to people's lives," said Joel Truitt, president of Joel Truitt Builders, a District-based general contractor.

Repairing a home eaten up by mold can also be pricey.While a simple spot on a carpet can cost less than $500 in cleanup, a more complicated problem involving structural damage can run a tab from $5,000 up to tens of thousands of dollars.

The more costly projects are the problem, putting insurance companies between angry homeowners and builders who did quick but sloppy work.

In some such cases, air pockets are left in the walls, allowing moisture to seep in. Mold can grow hidden behind the panel of a window that may not have been properly installed.

Repair companies don't care who writes the check but often blame the builders rather than the insurers for homeowners' mold problems.

"We've worked on multimillion-dollar homes that are beautiful physically, but structurally, it's poor construction," said Alan Wozniak, president and chief executive of Pure Air Control Services, a mold-remediation company. "It happens often in areas like Northern Virginia, for instance, and other areas of high growth, where homes are being built as fast as humanly possible.

"In many cases the builders buy homes back because they realize, 'We've caused a microbial nightmare,' and there's nothing they can do, but that's only after all this litigation occurred," Mr. Wozniak said.

And insurance premiums have risen because of the increased litigation related to mold claims.

A year ago, Farmers Insurance Group lost a $32 million lawsuit filed by a Texas family that said toxic mold in its home caused severe health problems. The jury found that the insurer failed to pay for repairs needed for a water leak, which allowed mold to grow rampant, making the house uninhabitable.

Since then, mold-related insurance claims in Texas have jumped about 600 percent, and homeowners' premiums have risen 20 percent.

A California homeowner was awarded $18.5 million in damages from his insurer when several water pipes in his home burst during remodeling and resulted in mold. …