View this article online: https://www.insurancejournal.com/magazines/mag-features/2002/08/19/22994.htm
Saying that new concerns exist about the potential of health problems related to mold, a congressional subcommittee held hearings recently in Washington, D.C., on “Mold: A Growing Problem.”
Submitting testimony on behalf of the apartment industry, the National Multi Housing Council (NMHC) and National Apartment Association (NAA) stressed that rental housing providers are committed to environmentally safe housing, but that the nation needs better science to effectively deal with the problem of mold. They also urged Congress to take action to avoid an insurance and financial crisis as a result of mold claims.
In its testimony, NMHC/NAA noted that mold is a complex issue because mold is everywhere and there are literally thousands of different types of mold. Currently no consensus exists among scientists about which molds affect human health and at what exposure levels. And, not everyone will react adversely to mold; the vast majority of human interaction with mold is benign and harmless. In the relatively small number of cases in which someone does react to mold, it is usually a mild to moderate allergic reaction. Severe allergic reactions are rare, and medical research has not been able to confirm whether other serious health effects attributed to mold are, indeed, actually caused by mold.
NMHC/NAA told Congress that for those reasons any health standards that are set need to be based on sound science.
The groups also explained that an increasingly aggressive plaintiffs’ bar is pursuing thousands of complaints nationally.
In response, insurers are excluding coverage for mold damage in homes, apartments, office buildings, schools and libraries leaving owners and cities responsible even when mold results from a covered event. NMHC/NAA called on Congress to establish a blue-ribbon task force of insurance firms, state insurance commissioners, the real estate industry and the medical/academic community to study the situation and make recommendations to avoid a possible insurance crisis.
While the hearing looked at ways to better understand mold, officials in Florida are casting an eye toward both Texas and California, as they believe their state is about to become the next hot bed for mold legislation in an effort to tackle rising litigation costs. Texas and California currently rank one-two in number of U.S. mold claims by state.
Both mold damage claims and mold-related lawsuits are on the rise in the Sunshine State, and they are not expected to subside anytime soon.
The Florida Department of Insurance is currently holding a series of three public hearings on mold. A spokesperson for the American Insurance Association (AIA), noted that the DOI is looking to make a decision on the more than 150 filings by ISO and individual insurers involving coverage for mold damage that have been pending for several months. The filings range from total exclusions to caps on coverage. The ISO personal lines filing provides for approximately $10,000 in coverage and buybacks of $25,000 and $50,000 in coverage. ISO’s commercial filings include the following options: total exclusion, no exclusion and coverage with some limitations.