Miami Beach, FL -The state Department of Insurance is holding the first of three public hearings in Florida today to receive consumer input as insurance companies and regulators try to balance who is responsible for paying for mold damage in homes and buildings. The first hearing will be from 3 p.m. to 7 p.m. today at the Plantation City Council Chambers, 400 NW 73rd Ave. The others will be in Tampa and Orlando in August.
Florida insurers, like those in Texas and California, have seen a rise in claims from mold. Florida insurers are only required to pay for mold damage if it resulted from an event that the insurance company covers, such as a pipe or water heater bursting. Insurers do not cover mold if it resulted from something a consumer could have fixed, such as a leaky faucet. Still, many more people are filing claims, the insurance companies say, because of the publicity of mold problems nationwide. And insurers say their policies are not priced to cover that influx. So, many insurers are asking the state to allow them to exclude mold coverage completely or place limits on the amount of money they have to pay out for a mold claim ranging from $5,000 to $10,000, the Insurance Department said. So far, the Insurance Department has received requests from about 400 insurance companies, said spokeswoman Tami Torres.
Many insurance companies are also asking the state to allow them to raise rates, blaming in part the rise in claims from mold and water damage. State Farm Florida Insurance Co. said the number of mold claims it received in 2001 jumped to 337 from 90 in 2000, said spokesman Tom Hagerty. The state recently denied the insurer’s request for an increase averaging 22 percent statewide for homeowners insurance, which includes individual condo unit owners. State Farm is appealing the Insurance Department’s decision to deny that rate increase, Hagerty added. “We are concerned that mold claims are going up,” he said. “Mold is nothing new. There now seems to be this heightened awareness and higher rates of serious illness related to it. We’re afraid it’s going to result in more claims. People are asking insurance policies to pay for things it was never designed to pay for.” And insurers are among those nationwide being hit with multimillion-dollar lawsuits because of health problems associated with mold claims.
In the past decade, about 9,000 mold lawsuits have been filed in the United States and Canada. Sam Miller, vice president of the Florida Insurance Council, said if insurers are forced to pay for lawsuits and for health problems associated with mold, insurance in Florida could become expensive and more difficult to find, as it has in California and Texas. Texas insurers paid out $854 million in mold losses last year, according to the Insurance Information Institute, a trade group. The average mold claim costs between $10,000 and $30,000, compared with a few thousand dollars in the past. “What has happened in Texas and California can definitely happen in Florida unless we can nip it in the bud,” Miller said.