The Georgia Department of Insurance released comprehensive mold endorsement filing guidelines, providing insurers with guidance on the minimum level of mold coverage required in homeowners and commercial lines policies.
According to the American Insurance Association (AIA), which was part of an industry group that negotiated with state regulators, the guidelines don’t allow for as much flexibility as carriers had wanted but they define clearly the scope of mold coverage the state will require.
For homeowners policies, the new Georgia guidelines are comparable to pending ISO filings. The guidelines provide that mold damage ensuing from a covered peril is covered up to the policy limits. They also require a minimum level of remediation coverage (for example, for air sampling and testing expenses) when mold results from a sudden and accidental water loss, plus the option for consumers to buy additional remediation coverage.
For commercial property and liability coverage, insurers wanted a greater range of coverage options than the Georgia guidelines allow, in light of the explosion in mold litigation, and the exorbitant costs involved in defending these cases.
“AIA appreciates the willingness of the Department to include insurers in this process,” Raymond G. Farmer, AIA assistant vice president, southeast region. “The surge in mold claims over the past two years has required insurers and regulators alike to work together to establish rational standards for mold coverage that provide consumers and businesses sufficient coverage options while also preserving a viable insurance market.”
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