Mold Causing A Stink

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MOLD CAUSING STINK FOR BUILDERS, INSURANCE COMPANIES

Sunday, January 6, 2002

FEATURES - HOME & GARDEN 01I

By Lee Stratton

Dispatch Home Reporter

Mold has grown into something more than a dark spot on the shower caulk. It

has become a major issue for courts, insurance companies and the building

industry.

Lawsuits against builders and insurance companies have mushroomed,

representatives of those industries said, pointing to several cases that

have cast the spotlight on the issue of insurance and builder liability for

mold-related problems.

A jury awarded $32 million in June to Melinda Ballard of Dripping Springs,

Texas. She alleged that her insurance company mishandled a claim for water

damage. Delays in repairs allowed mold to spread throughout the family's

22-room home. Ballard blamed the mold for her husband's memory and job loss

and their son's internal bleeding.

In February, Steve and Porath of Foresthill, Calif., burned their

$90,000 house and possessions. The couple said mold caused them to have

chronic breathing problems and their 2-year-old to vomit every night.

The issue also garnered national attention after Brockovich, an

activist portrayed in the Academy Award-winning movie of the same name,

announced that she, her husband and their three children were sickened by

mold in their California home.

The attention has sent the National Association of Home Builders scrambling

to provide members with information about the causes, prevention, detection

and safe removal of mold as well as litigation, legislation and

building-code issues.

Mold is a concern to some builders who have encountered liability problems

in new construction, said Donna Reichle, a spokeswoman for the National

Association of Home Builders. But mold is not on the radar screen of others

who have not encountered it, she said.

" It does have regional aspects to it, though it is not just something that

happens in Florida and Louisiana, where it stays hot and damp, " she said.

" Mold has become an issue in cold regions of Alaska and Minnesota and in dry

areas, including Texas. "

Because Texas insurance laws differ from most states, mold-related insurance

claims there have grown almost 600 percent in the past 18 months, said P.J.

Crowley, vice president of communications for the Insurance Information

Institute in New York. The size of the claims has more than doubled.

By the middle of 2001, more than 5,722 claims, averaging $23,000, had been

filed in Texas, Crowley said.

In most states, including Ohio, insurance policies cover mold damage only if

it results from materials that become wet in a covered incident such as a

ruptured waterline or a roof blowing off in a storm.

Mold that results from maintenance issues, such as a dripping pipe or washer

hose, are not covered. In Texas, however, some maintenance-related damage is

covered.

" As a result Texas has had some of the highest homeowner-insurance rates in

the country, and mold claims have been a driving factor, " Crowley said. " The

trend lines are for more claims nationally. There have been increases in

claims in Florida, Illinois, Pennsylvania, Arizona and Nevada. . . .

" What is important, is for the homeowner to take immediate and decisive

steps to dry out an area as soon as they have a problem, document what you

are doing for repairs and contact your insurer. It is in no one's interest

to have mold grow and flourish while you argue with your insurer. "

lstratton@...

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