When Mold or Water Intrusion Claims Are Denied in Florida
Mold is one of the most damaging problems a home can suffer from after a water leak. Mold grows rapidly, damages everything in its path, and can harm your health. In Florida, where high humidity and fierce storms often trigger devastating water leaks, many homeowners worry whether their insurance will cover mold resulting from such leaks. After all, you buy homeowners insurance to protect your home from various damages, so you can expect your provider to cover your damages.
Not necessarily. The outcome depends on where the mold came from and other factors. Insurance companies often contest water damage claims, regardless, due to the complexity of policy language and coverage exclusions. A Florida homeowner may have grounds to sue their insurance company if they are unfairly denied coverage. Understanding your legal rights and the claims denial process is essential for ultimately receiving compensation for your losses.
Why Insurance Companies Deny Mold and Water Intrusion Claims
Insurance claim denials for water damage and mold are common in Florida. Unfortunately, insurance denials in Florida are not uncommon, with a 2023 insurance claim report showing that 47% of homeowners’ claims were denied in the state. Approximately 44% of homeowners’ insurance claims in Florida were closed with no payment that year. In the case of water leaks and mold damage claims, denial letters are common for the following:
Policy Exclusions for Mold and Gradual Damage
Insurance companies in Florida frequently deny mold and water intrusion claims due to policy exclusions. Most standard homeowners’ insurance policies cover mold or water damage only when caused by a “covered peril,” such as a sudden pipe burst or a storm-damaged roof.
However, insurance policies typically exclude damage from “fungi” (mold) or “gradual deterioration,” meaning long-term leaks or humidity-related mold growth are often not covered. For example, if a slow leak from an aging pipe goes unreported for a year, insurers may argue the damage resulted from neglect rather than a sudden event. Always carefully review your policy’s fine print! Exclusions for mold remediation or chronic moisture issues are standard and can trigger outright denials or limited payouts.
Disputes Over the Cause of Damage
Another frequent reason for denial of water and mold damage claims is disagreement over the source of the water or mold damage. Your insurance provider may claim the damage stems from an uncovered event, such as flooding, poor maintenance, or wear and tear, rather than a covered peril like a burst water heater.
For instance, if a roof leak causes water to leak into your kitchen, the insurer might deny the claim if they believe the roof was improperly maintained before a storm. Insurance adjusters often scrutinize the timeline and cause, relying on inspections to argue that the homeowner’s negligence contributed to the damage. This makes it critical for homeowners to document the incident and obtain independent assessments to challenge the company’s findings.
Failure to Mitigate or Report Promptly
Insurance policies require homeowners to mitigate damage and report claims promptly; failure to do so can result in denials. If you delay reporting a water leak, allowing mold to spread, the insurer may deny the claim, citing failure to prevent further damage.
For example, leaving wet carpets or drywall alone after a pipe burst can be grounds for denial. Insurers expect reasonable efforts to dry the area or stop the water source. Similarly, late reporting can raise suspicions about the claim’s validity or allow your insurer to argue that evidence of a covered peril was lost.
Remember to act immediately if you notice a water leak in your home. Document your mitigation efforts with photos, videos, and relevant documentation, such as invoices from water extraction companies. Notify your homeowners’ provider as soon as you see damage from water and mold.
Insufficient Evidence
Denials often occur when homeowners fail to provide sufficient evidence that the damage is covered under their policy. Insurers may request detailed proof, such as photos, receipts for repairs, or professional reports, to verify your claim.
If you cannot demonstrate that the water intrusion came from a covered event or if the mold damage lacks a clear link to a recent incident, the insurance company will likely deny your claim. For example, without a plumber’s report confirming a sudden pipe failure, your insurer might classify the damage as gradual. You can strengthen your water and mold damage claim by hiring professionals, like mold inspectors or public adjusters, to provide expert documentation and counter your insurance company’s assessment.
Bad Faith Practices and Cost Minimization
In some cases, insurance companies deny claims to minimize payouts or exploit policy ambiguities, a practice that may be considered bad faith. Florida’s high rate of mold and water damage claims, due to its humid climate and frequent storms, puts pressure on many insurance companies to limit liability.
Some insurers may undervalue claims, delay processing, or misinterpret policy terms to avoid covering the expensive mold remediation, which can cost between $15,000 and $30,000. If your insurer denies your valid claim without a reasonable basis, you can pursue legal action for bad faith under Florida law, potentially recovering damages and attorney fees. Consulting an experienced attorney or public adjuster can help identify bad faith tactics and ensure the insurer is held accountable for wrongly denying your claim.
What Constitutes Bad Faith Denial Under Florida Law
Under Florida law, bad faith insurance claim denial occurs when an insurance company unreasonably denies, delays, or underpays a valid claim, violating its duty to act in good faith toward the policyholder. Florida Statute 624.155 allows policyholders to sue insurers for not attempting “in good faith to settle claims when, under all the circumstances, it could and should have done so, had it acted fairly and honestly.”
For mold or water intrusion claims, bad faith may involve the insurance company denying your claim without conducting a reasonable investigation, misinterpreting policy terms to avoid coverage, or failing to communicate with you promptly. For example, if an insurer denies your mold claim caused by a covered pipe burst without inspecting the property, this could constitute an act of bad faith.
Bad Faith Examples
Bad faith practices in Florida often include actions that prioritize the insurer’s financial interests over the policyholder’s rights. These can include:
- Denying a claim without conducting a thorough investigation, such as ignoring evidence of a sudden covered peril like a storm-related leak.
- Unreasonably delaying claim processing, leaving homeowners to deal with worsening mold damage; (3) misrepresenting policy terms, such as falsely claiming mold is never covered when the policy includes limited mold remediation.
- Offering a lowball settlement that fails to cover necessary repairs, like mold remediation costing $15,000-$30,000. For instance, if an insurer delays payment for months, causing mold to spread, you could argue that the delay constitutes bad faith due to the preventable escalation of damage.
How To Prove Bad Faith
To succeed in a bad faith lawsuit under Florida law for water and mold claim denial, you must prove that the insurer’s actions were unreasonable and that the claim should have been paid based on the policy and evidence.
This requires showing that the insurer had no legitimate reason to deny or delay your claim and that it failed to act with due regard for the policyholder’s interests. Homeowners must first resolve the underlying claim, either through a settlement, appeal, or lawsuit, before pursuing a bad faith action. This process was established in Blanchard v. State Farm (1991).
Evidence, such as correspondence with the insurer, expert reports from your mold inspector, and documentation of the claim’s timeline, is critical. For example, if you provide a plumber’s report confirming a sudden pipe failure and the insurer still denies coverage without explanation, this strengthens a case of bad faith.
Steps to Take After a Denied Mold or Water Intrusion Claim
A denied mold or water intrusion claim is upsetting, but taking the following actions can lead to a favorable outcome:
Review Your Denial Letter And Insurance Policy
The first step after a denied mold or water intrusion claim in Florida is to carefully review your insurer’s denial letter, which should explain the reasons for the decision. Common reasons include policy exclusions for mold, claims of gradual damage, or failure to mitigate the damage.
Next, review your homeowners’ insurance policy to understand the coverage terms, particularly for “covered perils” such as sudden pipe bursts or storm damage, as well as exclusions for “fungi” or flooding. Compare the denial reasoning in the denial letter with the policy language to identify discrepancies. For example, did your insurer misclassify a sudden leak as a gradual one? Document any unclear or questionable points in the denial letter; these can form the basis for an appeal or legal action. If the policy is ambiguous, consider consulting a public adjuster or your attorney for clarification.
Document The Water/Mold Damage And Mitigation Efforts
Gather and preserve evidence to support your water and mold damage claim, as this is critical for appeals or potential lawsuits. Take clear photos and videos of the water damage or mold, including affected areas such as walls, floors, and furniture. Collect receipts for any mitigation efforts you made, such as hiring water extraction services, purchasing dehumidifiers, or temporary repairs to stop leaks.
Obtain a professional inspection report from a licensed mold inspector or contractor to confirm the cause, such as a covered peril like a burst pipe. Avoid starting major remediation until an adjuster has inspected your property; premature repairs could weaken your case. Keep a detailed log of all communications with the insurer, including dates, names, and summaries of conversations, to establish a clear timeline.
File An Appeal With The Insurance Company
Submit a formal appeal to your insurance company’s appeals department within the timeframe specified in the denial letter or policy, usually 30 to 60 days. Write a clear, concise appeal letter addressing the denial’s reasons, supported by your evidence, such as photos, inspection reports, and repair estimates for water and mold damages.
For example, if your insurer claims the mold resulted from neglect, provide your plumber’s report showing a sudden pipe failure. Request a reinspection if the initial adjuster’s assessment seems inadequate. Track the appeal’s progress and maintain copies of all submitted documents. If the appeal is denied, you can file a complaint with the Florida Office of Insurance Regulation (OIR).
Hire An Experienced Public Adjuster Or Property Damage Attorney
If the appeal fails or the claim is complex, consider hiring a public adjuster or property damage attorney. Public adjusters, licensed in Florida, advocate for homeowners, reassess damage, and negotiate with insurers, often securing higher settlements on their behalf. They typically charge 10-20% of the claim payout. Alternatively, attorneys specializing in insurance disputes, such as Kennon Law Group, can challenge denials, especially if bad faith is suspected.
Many attorneys work on a contingency basis, meaning there are no upfront fees unless you recover compensation. Legal representation is crucial for claims involving expensive water and mold damage. Mold remediation can cost $15,000-$30,000, and Florida law may allow recovery of attorney fees if you win a lawsuit.
Suing Your Insurance Company: Legal Remedies for Florida Homeowners
Florida homeowners can sue their insurance company for wrongful denial or underpayment of water and mold damage claims. Your case is robust if the insurance company fails to honor the policy’s coverage for “covered perils” like sudden pipe bursts or storm-related leaks.
Common grounds include breach of contract, where the insurer improperly denies a valid claim, and bad faith under Florida Statute 624.155, where the insurer unreasonably delays, denies, or underpays without a legitimate basis. For example, if an insurer denies a mold claim caused by a covered water heater failure without conducting an investigation, this could justify a lawsuit.
Homeowners must first resolve the underlying claim through payment, appeal, or litigation before pursuing a bad faith action. Understanding the policy’s terms, especially exclusions for “fungi” or “gradual damage,” is critical to building the strongest case.
Filing a Civil Remedy Notice (CRN)
Before suing for bad faith, Florida homeowners must file a Civil Remedy Notice of Insurer Violation (CRN) with the Florida Department of Financial Services. The CRN notifies the insurer of the alleged violation, such as an unreasonable denial of a mold claim, and gives them 60 days to correct the issue, typically by paying or reassessing the claim.
The notice must include details such as the policy number, claim number, and specific violations. If the insurer does not resolve the issue within 60 days, the homeowner can proceed with a bad faith lawsuit. Filing a CRN is a critical step, and a property damage attorney can ensure it is completed accurately to avoid procedural dismissals. If your claim was wrongfully denied, you may sue for breach of contract and potentially for bad faith.
Working with a skilled property insurance dispute lawyer is essential for a denied water and mold denial case. Your chances of a successful outcome are higher with a mold growth and water damage attorney, and they maximize the potential recovery.
Why Hire a Florida Property Insurance Dispute Attorney
Hiring a Florida property insurance dispute attorney is crucial for homeowners facing denied or underpaid water and mold claims. Insurance dispute lawyers in Florida possess vast knowledge of Florida’s complex insurance laws.
A skilled insurance dispute attorney can significantly increase the compensation homeowners receive for water and mold damage, which often involves costly repairs. Your insurance company may offer a lowball settlement or deny your claim outright to minimize payouts. Skilled attorneys counter these tactics by presenting robust evidence, such as professional mold inspection reports, repair estimates, and maintenance records. They can also pursue a bad faith claim against an insurance company for unreasonably delaying or denying a valid claim for mold damage.
Discovering that you have a serious water and mold damage problem in your home is alarming. The problem deepens if your homeowners’ insurance provider denies your claim incorrectly. Don’t deal with this problem alone. Retain the experienced mold denial claims lawyers at Kennon Law. Our skilled legal counsel has successfully litigated numerous mold and water damage claims and knows what it takes to build a robust case. Contact Kennon Law today for a legal consultation at (888) 878-4267.
