Q. My tenant reported mold in a house that is 6 years old. We had a company test and they said the mold was caused by the a/c, due to a low refrigerant level, which caused high humidity levels in the house. At first, the insurance company said we were covered. But when the tenants request reimbursement for a medical x-ray, which showed a spot on the lung, the insurance said we were not covered. They said it was not a covered peril. They said that the a/c caused the 70% humidity which caused the mold. The remediation estimates are in excess of $30k and it appears there will be a medical claim. There were 69 days involved from the time the tenants first noticed the mold until they vacated the house. Also, the tenants’ personal items are supposed to be discarded. Am I responsible for that? The lease required them to have renters insurance but this is the second year of the lease and they did not renew it after the first year. Also, I have seen web ads for a mold bomb fogger that is supposed to be approved by the EPA. It is from Biocide Labs. Has anyone ever used it?

A. After reading your post it appears you have two issues going on, one that may be covered under your own property insurance policy (the resulting mold damage if it is covered) and a possible third party liability claim for a health issue with your renter. Mold is usually not a covered peril. However, it may be covered depending on the policy and the state law where the loss occurred as a “RESULTING LOSS.” A mold loss is subject to the limits for mold coverage to personal and real property. The other health claim matter should be turned over to your liability insurance carrier as soon as possible.

Without all the facts, I would guess you only have one carrier that covers you for both first party property coverage and also has the liability coverage in the same policy. They likely made a very bad decision by not paying for the medical expense of the renter and sitting down with them to talk about a possible settlement. You need to review this with a lawyer who knows property insurance policies and can give you advice on how you need to pursue this matter to protect yourself from a lawsuit and recover any damages from mold to your own property.

As to the "mold bomb" I would be very careful with this approach. Mold losses require a level of professional service such as air quality testing to determine a proper protocol for repairs, and then a remediation plan to clean up the mold. Then, final air quality testing is done to make sure all mold has been removed. This type of work is best left to the professionals! 

If you have questions regarding any property insurance related issues, please call 800.321.4488 or contact us to submit a question to one of our public adjuster or loss assessor experts.