MOLD COVERS HOMES, HELD: INSURANCE DOES NOT COVER MOLD

                    Who Rebuilds and Repairs Where No Insurance Exists.

[THIS POST WAS ORIGINALLY PLACED ONLINE ON OCTOBER 11, 2006.  A POSTSCRIPT HAS BEEN ADDED THIS 16th DAY OF DECEMBER, 2006.]

    It is a fact that mold covers homes.  It is held under a standard Exclusion that insurance does not cover mold in Fiess v. State Farm Lloyds, 2006 WL 2505995 (Tex. Case No. 04-1104 Opinion Filed Aug. 31, 2006, answering this Question Certified by the Federal Fifth Circuit Court of Appeals) (subscription required), public access provided by Texas Supreme Court.

   The Fiess case in Texas involved a standard Exclusion used throughout the United States for "ensuing loss".  In a homeowner's policy, including the one in Fiess, water damage is ordinarily listed as a covered peril.  An Exclusion for "ensuing loss" excludes all coverage, however, for damage that ensues from an otherwise covered peril.  The modern homeowner's policy adds "mold" to the list of excluded ensuing loss.

    In Fiess, the Supreme Court held that mold damage is an excluded ensuing loss even though water damage is otherwise covered.  As a Federal Court recently held:  "After Fiess, even if the water damage is otherwise covered, resulting mold contamination is not."  Download gordon_publicly_issued_opinion_and_order_9_27_06.pdf

    The legal holding is clear.  The factual result is, well, a little more moldy and unclear.  The practical, if not legal question that remains, is:  Who will repair and replace when no insurance exists?

Postscript added Saturday, December 16, 2006:
The practical, if not legal question, that ended this post in October, 2006 still remains.  However, in the Fiess case itself, the Federal Fifth Circuit Court of Appeals affirms the District Court holding "that the Fiesses' Homeowners Form B (HO-B) policy did not cover mold contamination."   (Slipsheet at 1, Fifth Circuit Opinion Filed December 12, 2006.)  The District Court's holding and judgment of No Coverage now conforms to the Texas Supreme Court's "holding that the ensuing-loss provision did not provide coverage for mold contamination."  (Id. at 2.)

REMINDER:  THE CONTENTS OF THIS BLOG DO NOT MAKE AN ATTORNEY-CLIENT RELATIONSHIP.  ALWAYS CONSULT THE CASES AND LAWS OF EACH PARTICULAR JURISDICTION AND AN ATTORNEY IN AND FAMILIAR WITH THE PARTICULAR JURISDICTION AND ITS LAWS, WHENEVER YOU TRY TO ADDRESS OR RESOLVE ANY LEGAL QUESTION.