Eric Goldberg, American Insurance Association (AIA) assistant general counsel, appearing at a hearing held by the New York State Senate’s Health and Environmental Conservation Committees, stated that consumers, insurers, regulators and lawmakers need sound science on mold.
According to a bulletin issued by the Professional Insurance Agents of New York, Goldberg stated that, “Insurers are caught in the middle on the problem with mold. There is no scientific consensus on what the mold problem is or how to deal with it. If insurers pay for mold remediation, they have no certainty that what is being done is effective or even necessary.” He added that, “Insurers are not supposed to pay claims that are not covered by a policy. To do so would be unfair to policyholders and stockholders.”
Goldberg explained that homeowners’ insurance policies are not home warranties. Insurance policies do not cover wear and tear or the failure to maintain a home. While property insurance policies and coverages differ, mold is generally excluded unless it is a consequence of a covered loss. In most instances, mold caused by failure to maintain a home would not be covered. However, in select cases, such as mold caused by water used to put out a fire, mold would be covered.
Goldberg likened the mold problem to other required home maintenance, such as repairing the plumbing or the roof, and indicated it shouldn’t be included “within the coverage of a standard property insurance policy.”
He urged legislators and regulators to study this problem carefully and to conduct further research before acting on a solution. “This issue can have adverse effects on the cost of insurance and the solvency of insurance companies if not addressed responsibly and rationally,” Goldberg concluded.
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