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Landlords: Insurance companies now are denying many Mold Claims

Landlords and other property owners have so much on their plates. They need to worry about increasing utility costs. Taxes are always rising. So are maintenance and repair costs.

Then there are the flooding concerns. With global warming many properties will be impacted over the next several decades. And commercial property owners have to worry about their continued utility. In the pandemic many businesses learned that they do not need to rent as much space as they once had.

One of the trickiest concerns for landlords concerns insurance. Insurance companies make money by charging premiums and investing what they have. They do not make money by paying claims. In fact, quite the contrary.

Which means that when carriers start to see a lot of the same kind of claim, they simply begin to exclude it from coverage. Case in point: the pollution exclusion clause. When property owners started filing claims to clean their contaminated properties, insurance companies excluded coverage for pollution claims. Which has been a disaster for many property owners.

When they started having too many flooding claims, they stopped covering water damage claims. That’s another disaster. And the problem is that state regulators are all too happy to go along with this. The insurance industry wins this way. Property owners- they often are bankrupted by these events.

And now the newest problem: the microbial exclusion. Landlords have heard about mold related lawsuits for the past 15 years or so and so have insurers. And in the past several years they have started excluding mold claims from insurance policies. Its done kind of quietly. Usually property owners don’t know the coverage has been eliminated until they need the coverage.

So when a landlord is sued for a mold claim by a tenant –the landlord files a claim with his or her insurer. And now often the insurer denies the claim based on this exclusion. Zero coverage, the landlord is on his or her own.

When the claim is for property damage: which can be in the thousands of dollars, the landlord can be on his or her own. All that money now comes out of the landlord’s pocket.

And when the tenant claims he or she has become ill and maybe even that he or she has cancer because of mold, the carrier denies the claim again. The value of that claim can be anywhere from zero to hundreds of thousands of dollars. Or more. And landlords can be on their own if an insurance carrier claims there is no coverage. Many landlords feel despair and hopelessness when their insurer does this to them.

At our firm we take parallel approachs when landlords retain us in mold litigation when their carrier has denied the claim. First –we will respond to the claim, or the lawsuit if one has been filed. Our law firm has handled mold claims for decades. We know the score and we will defend you.

Second, if the landlord wants us to do so, we will take another look at that denial from the carrier. Was it fair? Is is a correct application of the microbial exclusion? Was the policy holder given notice of the exclusion? Do the facts support the exclusion?

This can begin with a letter to the carrier asking that the matter be revisited. If need be it can even result in a lawsuit being filed against the carrier for breach of contract and of fiduciary duty.

No one wants a lawsuit. Our landlords don’t want to be sued for mold claims –especially when they have done nothing wrong. And they do not want their insurance carrier to leave them to fend for themselves, after years of paying expensive premiums with the thought that the insurance company would be there when needed.

Landlords have enough to keep them busy. Unfair mold claims, coupled with unfair treatment from their insurer –that’s more than most people can handle.

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