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Nearly half of Americans falsely believe home insurance covers mold damage

Posted On Wed, May 15, 2013

While consumers typically understand where they can find insurance quotes, they appear to have some misunderstandings about home insurance and what it provides for.

According to the survey, which was conducted by research firm PSRAI, more than four in every 10 respondents said that they thought their coverage policy would cover them if they were to encounter mold damage within the home.

Mold often develops in dark, wet, moisture-filled areas of a home. While the damage is typically only cosmetic, it can occasionally result in significant structural damage if it goes for a lengthy period of time without being treated.

Laura Adams, a senior insurance analyst for an insurance quote comparison company, pointed out that this type of misinterpretation can wind up costing policyholders a lot of money, as they may decide not to address the issue because they're under the impression that their insurer covers it.

"Mold remediation can cost tens of thousands of dollars," said Adams. "It's often not covered by homeowner's insurance, especially if it was caused by neglected maintenance such as a leaky pipe."

Where policyholders appear to have a better grasp on things is as it relates to fire damage. According to the poll, nine in 10 understood that their policy protected them from property destruction caused by a fire and nearly three-quarters said that they knew their carrier would cover them if they were sued by a visitor after being injured while on their premises.

There are a variety of other issues that insurance customers falsely believe about coverage, especially as it relates to the establishment of insurance rates. The Insurance Information Institute has a list of them at their website that consumers can use to help get a clearer picture of how premiums are established.

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