Mold Boosts Home Insurance

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http://www.washtimes.com/business/20020607-70270980.htm Mold boosts home insurancea StefanovaTHE WASHINGTON TIMES Published 6/7/2002 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 a recent large mold-related lawsuit 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 Truitt, president of 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. The homeowner was away at the time, so the leaking pipe in the attic went undetected for several days. Several celebrities also have jumped on the litigation bandwagon. Among the most prominent cases is that of Brockovich, who discovered mold in a house she bought after the story of her legal crusade on behalf of pollution victims in California was turned into a movie. Entertainer Ed McMahon, too, is having problems. A few weeks ago he filed suit against his insurance company for more than $20 million, saying that he was sickened by toxic mold that spread through his Beverly Hills house after contractors cleaning up water damage from a broken pipe botched the job. Mr. McMahon and his wife, Pamela, became ill from the mold, as did members of their household staff, according to the Los Angeles County Superior Court suit. The couple also blames the mold for the death of their dog, Muffin. Mold spreads by sending off spores, which contain poisons that can affect the health of those who inhale or ingest them. Still, the health threat is under debate, as authorities have never set standards for acceptable levels of exposure. The National Academy of Sciences is working on a mold report, due in April, for the government. The National Centers for Disease Control and Prevention says up to 10 percent of the population may be allergic to molds. Common health problems include nasal stuffiness, eye irritation and wheezing. The most dangerous but less common type of mold is Stachybotrys chartarum, or "black mold." It produces multiple toxic spores that can become airborne and cause health problems, from headaches and dizziness to cancer and bleeding in the lungs. Mold shows no prejudice toward the poor or the wealthy. Locally, it has no neighborhood preference. The fungus has grown as much in dilapidated former public housing projects east of the Anacostia River as it has in plush housing such as the Residences at the Ritz-Carlton, at 22 and M streets NW. The latter, an 18-month-old enclave of swank condominiums and penthouses populated by the likes of Jordan and Mia Hamm, has been attacked by an aggressive black mold that has made some residents sick. In Gaithersburg, a new community found itself under siege by mold because the builders used plywood from the Carolinas; the wood had been infected by mold during Hurricane Floyd in 1999. Now mold is in the homes' structure. "The problem is that if it's not cleaned up within 24 to 48 hours, mold issues are guaranteed in a home," said Mr. Wozniak, who adds that schools and old government buildings are often a haven for mold, because they haven't been repaired in years. Texas, California, Florida and New York are hotbeds for mold problems. Legislation has been enacted in California, and is pending in Connecticut, Nevada, New Jersey and New York. The California bill requires a home seller to disclose to potential buyers any mold-related problems. No such laws are being considered locally, though two weeks ago a mold seminar was held at the Ritz-Carlton Tysons Corner. Among the issues was how insurance companies should defend themselves in mold lawsuits, as well as the "politics of mold," which was perhaps thrown in to lighten up an otherwise dark topic.