Most – if not all – homeowner insurance policies in the marketplace contain limitations or exclusions in them for fungi, wet or dry rot, and bacteria. On the surface this might not seem like a big deal; however, should a slow water leak in your home lead to mold that isn’t detected for quite some time, this can be a real concern.

The vast majority of the standard/preferred insurance policies I’ve dealt with address this type of peril by capping coverage for two types of situations:

• Section I: Damaged property at the residence premises due to the presence of fungi/wet or dry rot/bacteria.
• Section II: Bodily injury or property damage liability stemming from the inhalation of, ingestion of, contact with or exposure to fungi/wet or dry rot/bacteria.

The first situation is the most common. Typically, the presence of moisture causes mold to grow behind drywall or in another location that isn’t easy to see. Once the issue is finally discovered, the costs to remediate it can be quite high. The standard limit of insurance for this situation is $10,000 and, depending on the extent of the damage, this may not be enough.

The second situation, while uncommon, can certainly lead to large problems if someone gets sick from being exposed to mold or bacteria in your home. Again, there is a standard limit of coverage for this type of situation – typically $50,000 – and this may not be enough depending on the extent of the exposure.

Don’t panic, though! For a relatively small additional premium, both of these limits of insurance can be increased on your policy. Typically, Section I coverage for damaged property can be increased to a limit of $50,000, and Section II coverage for bodily injury or liability can be increased to a limit of $100,000.

Do yourself a favor and speak with your local independent insurance agent regarding how you can better protect yourself against water-related situations such as fungi/wet or dry rot/bacteria, water backup of sewers and drains, and flood. A few extra dollars spent on additional coverage can save you thousands of dollars in repair bills should disaster strike!

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