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Property & Casualty Insurance/Mold coverage for A/C air handler

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Question
QUESTION: Dear Mr.  Williams,

I have reached the $10, 000 limit for mold issues in my policy as a result of my A/C backing up.  My A/C mechanic tells me I have lots of mold growing in the insulation surrounding the interior of the air handler and it cannot be cleaned.  The compressor is 15 years old; if I replace the air handler I also need to replace the compressor.  I would like to know if this can be covered by my insurance (a very reputable company) under the Personal Property portion of my policy.

Thank-you.

ANSWER: Maylin,

I'm sorry to hear about your mold issue.  That can be very dangerous depending upon what kind of mold is growing.

The first thing that crosses my mind is a question: what caused the mold?  Most HO policies cover up to $10,000 for cleanup of mold that is caused by a covered peril.  Was there another claim that led to the mold damage and resulting cleanup?

The answer to those questions is what will help me answer your questions a little better.

Thanks.

---------- FOLLOW-UP ----------

QUESTION: The mold was caused by the back-up of the air handler.  I was away for a few weeks and upon my return I found water leaking from the A/C.

Answer
Marlin,

Thanks for the additional information. Typically, the limitation for mold in the policy is for cleanup and removal. Some companies do include damage caused by mold in that limitation. This is one of those times where I think there is a difference. The proximate cause of the mold was the water loss. As such, I would argue that water caused the damage and resulted in mold. Usually, if the mold is the result of another cause of loss...in this case the water backup...the mold limitation does not apply.

As far as the compressor is concerned, again this falls into a gray area. As an example, there are times when a partial roof loss results in the replacement of the entire roof but other times it does not. If its a case where the old compressor will not function with the new inside unit, it's possible that the cost of the compressor would be part of the covered loss.

The ultimate determination will be made by what the adjuster determines from the information given by the HVAC contractor. In the end, if you disagree with the amount or total of the loss, the policy does allow for a dispute resolution.

I hope that helps a little. Please let me know if you have more questions.  

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Jay K. Williams, AAI, AIP, CIC, CRM

Expertise

I can answer questions relating to the following coverages: personal auto; homeowners; commercial auto; commercial liability; commercial property; business income and all other property and casualty coverages.

Experience

I have been in the insurance industry in Florida since 1979. I am currently the president of a Florida domestic insurance company subsidiary. I've taught continuing education classes in Florida and across the country. I am quite familiar with all coverages including Florida Condominium master policies and unit owner policies. I also specialize in agent professional liability. I have been a professional educator since 2001.

Organizations
I am a member of the Florida Associaion of Insurance Agents, the state affiliate of the Independent Insurance Agents and Brokers of America.

Education/Credentials
I currently carry the following professional designations: Accredited Advisor in Insurance (AAI) Associate in Insurance Production (AIP) Certified Insurance Counselor (CIC) Certified Risk Manager (CRM)

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