Is mold covered by your home owners or flood insurance? If you had to think about the answer to that question, then you could benefit from a better understanding of the specifics of your insurance coverage. The difference between knowing and not knowing could mean thousands if your home is attacked by mold.

Because insurance claims on mold damage and removal has skyrocketed over the last decade, insurance companies are scrambling to rewrite their coverage policies. Make sure you have a copy of your insurance that is current and up-to-date. Some laws allow the policy to change when it is up for renewal. Also, be aware of when your insurance company is able to change your policy. You might have the rug pulled out from under you if your insurance covers mold one day and the next day it does not.

Review your policy carefully. Make sure you understand your policy and the precise circumstances when mold is covered. Most policies fall into one of these categories:

All Mold damage is covered for any reason. This is unlikely but some insurance companies offer full coverage.

Mold damage is covered if it is the result of a flood, hurricane or other Act of God. In other words, if the water damage was not caused by you then it is not covered.

Mold damage is covered by Act of God but you are required to take responsible steps to mitigate the problem. This is the category most homeowners fall under. A small leak can turn into a major mold problem if it is ignored. It isn’t fair for insurance companies to pay for irresponsibility and many claims are dismissed in court for this reason. It is up to you to find out what actions you must take on your part so that you can collect on damages. Carefully photograph and document what actions you take so that you have evidence if the claim ever goes to court.

Mold damage is covered by Act of God but is limited to a certain amount. This amount is often $5, $10, or $15,00 – much less than the typical amount claimed to cover damages ($100,000+). This keeps insurance companies out of court and prevents million dollar claims. Many insurance companies are starting to change their coverage to this category.

Mold damage is not covered whatsoever. Because it is so difficult to recreate an accurate timeline of events that resulted in mold damage, many insurance companies are avoiding the drawn out court battles by dropping mold coverage altogether. Even if your insurance covers flood damage, it may not cover mold as a result of the flood. Read carefully for this distinction.