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| | 1/5/2009 11:50:44 PM |
June 5, 2002 - In October
Steve Gibson and his wife, Susan, heard a ticking sound coming
from inside a wall in the garage of their Novato home. It proved
to be the sound of water dripping down from the kitchen above.
The dishwasher drain had failed.
Gibson felt the slimy pool beneath the base of the kitchen cabinets
and called his insurance company. A water-damage contractor
came the next day.
Gibson, a retired Navy officer with a penchant for results,
was relieved at the quick response. Then the contractor pulled
back the wallboard in the garage, revealing mold.
Every day since has been a battle. Fighting a turf war against
mold is hard enough by itself. Mold doesn't need much to survive
besides moisture, and given enough of that it can spread quickly
throughout a home, colonizing areas like the insides of walls
and the undersides of carpeting that are out of sight, hard
to reach and costly to treat.
But Gibson insists that the insurance adjuster exacerbated the
initial mold problem by dragging her feet on the cleanup. The
water-damage contractor dehumidified the garage for 10 days,
then packed up his equipment and left. A week later an industrial
hygienist took air samples. Then weeks passed with no further
action.
It was during this time, Gibson said, that the mold spread throughout
the house and that he, Susan and their 9-year-old twins started
to become ill with headaches, nasal irritation, nausea and diarrhea.
Aggravated and confused, Gibson pursued his own answers. He
learned on the Internet that the present industry standards
(called the NYC guidelines after the city in which they were
first used) would not have involved a hygienist at the beginning
of the process. All areas affected by the water damage would
have been cleaned up or removed immediately in an effort to
prevent the spread of the mold, and a hygienist called in, if
at all, to test the air after the cleanup.
Roger Wildermuth, a spokesman for the insurer, USAA, said the
company adopted these standards after Gibson first filed his
claim. Also, reconciliation of the standards is still continuing.
"The NYC guidelines only cover items directly affected by water
damage. This complicates matters when mold has spread beyond
those items. There is a lot that can happen in these cases,
and unfortunately any given policy can't mirror the hypothetical."
Yet the family's concerns were far from hypothetical. "I was
afraid we'd have to move out of a house that would be impossible
to sell," said Gibson, who works out of his home part time as
a real estate appraiser.
Gibson called a meeting with the adjuster, hygienist and water-damage
contractor and demanded a plan to rid the house of the mold.
The adjuster authorized the contractor to go back to work on
the house. Meanwhile the family had abandoned the bedrooms of
the house, whose carpets had become moldy, and were sleeping
like bivouacked soldiers on cots in the half of their family
room that was not contained for cleanup.
The process of chasing the mold through the house dragged on
through the winter. Finally, the interior was cleared by the
hygienist for remodeling. And while the condition of these rooms
has been improved, Gibson and his family remain bothered by
allergic reactions. He also remains burdened by the share of
the estimated $100,000 in expenses that he has fronted pending
final settlement of the insurance claims.
"This should have been a 90-day
process," he said. "but it's going to take nine months or more."
Sealed homes
The Gibsons are hardly alone in their experience. Mold has fast
become a hot issue among homeowners and a hot potato for insurers.
A generation after the home building industry adopted the materials,
mechanical equipment and construction techniques to improve
energy efficiency, the dark (and dank) side of this revolution
has come to call. Modern homes may be less drafty, but they
also tend to trap moisture. When water vapor enters the house,
it often lingers, creating ideal conditions for mold growth.
As the problem spreads, how much of it can be insured? The answer
in most states is all or nothing. In nearly every state, explained
Mark Sektman of the American Insurance Association, an industry
group representing more than 400 member companies, homeowners'
insurance covers unforeseen events but does not act as a warranty
on the home.
Thus homeowners policies are responsible for mold only when
it results from a "covered peril" such as a broken drainpipe
or a tree striking the roof during a rainstorm. Other causes
of mold, such as construction defect and improper maintenance,
have been standard exclusions for 30 years or more.
Standard exclusions are in fine print. But in the past five
years reports of homeowners claiming to suffer from mold-related
illness have made headlines by winning multimillion-dollar damage
awards from builders and insurance companies. This attention
has led to a torrent of claims and lawsuits by homeowners.
And not surprisingly in an issue combining media attention,
environmentalism and litigation, California is on the front
line of the debate, second only to Texas in the number of mold-related
insurance claims (the Lone Star State does not allow insurers
to exclude mold in water damage claims). California reigns supreme
in lawsuits over mold caused by construction defect.
The action in these two states has pushed the insurance industry
into the midst of a minefield. Sektman points out that large
damage awards in Texas since 2000 have resulted in a 40 percent
increase in the rates for homeowners insurance.
Insurers pull back
Most major insurers have stopped writing homeowners policies
there. And in mid-April State Farm Insurance - which covers
one in five California homeowners - announced it will no longer
issue new policies in California, citing the proliferation of
mold claims among the chief reasons.
"Mold is an uninsurable risk when health effects come into play,"
said Sektman. "There is no scientific proof that mold causes
illness. There are no legal standards for remediation. There
is no licensing for the professionals who test for and remove
mold from homes."
All true at present, but it's an eroding thesis. Medical research
is zeroing in on the links between mold and a range of ailments
in an effort to substantiate definitively what has been widely,
if anecdotally, known for years. And the California Department
of Public Health is drafting regulations on mold that are likely
to set a precedent for other states.
Mold may soon make it very hard for property insurers to do
business and homeowners to obtain coverage. Critics of and within
the industry warn that insurance companies will suffer their
own mold-related illness if they continue to identify themselves
with the problem and not the solution. Resistance and delay,
as both the Gibsons and the insurance industry have learned,
only cause the problem to mushroom.
© Copyright 2009 The Miller Law Firm. All rights Reserved.
If you experience problems or have questions, contact us at Info@ConstructionDefects.com.
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