La. Commissioner Calls State Farm Mold Notice Misleading

A notification from State Farm to its Louisiana homeowner customers citing an exclusion of mold coverage is misleading, according to acting Commissioner of Insurance Robert Wooley. Wooley said the company has notified its Louisiana policyholders that, effective with all renewals, its new Fungus Exclusion Endorsement eliminates coverage for any type of fungus, including mold.

“The Louisiana Department of Insurance requires an insurance company to cover mold damage resulting from a sudden or accidental covered event,” Wooley said. “The expenses for repairing or replacing the damaged property, including the costs to disinfect mold, are covered.”

One example of a sudden and accidental covered event would include, in most cases, a pipe in a home or business that bursts due to freezing weather, causing water damage which results in mold. However, a standard homeowners policy does not provide coverage for seepage, damage arising from wear and tear, or the failure to do proper maintenance. In Louisiana, as in most other states, insurers do not have to pay for mold claims that arise from slow leaks associated with home maintenance problems. They also do not have to pay for mold testing and remediation.

“I have scheduled a meeting with State Farm executives later this month to sort out any confusion,” Wooley said. “But policyholders need to be aware that there is no blanket exclusion for mold coverage in Louisiana.”

Homeowners wanting to know more about their policies should contact their State Farm agent. Policyholders can also contact the Louisiana Department of Insurance at (800) 259-5300.