By Christopher Walker. The California legislature is considering a bill that would prohibit insurance companies from excluding mold claims from liability and property policies issued in the state.
Introduced by State Senator Deborah Ortiz, the bill, according to an analysis by the Senate Committee on Insurance, intends to stop a trend in which insurers exempt policies from paying any claims related to mold damage, even when the cause of the mold is covered.
Opponents of the measure argue it will drive premiums up and push insurers out of the California market. A memorandum to the Senate from the Personal Insurance Federation of California (PIFC) argues that a similar measure in Texas led to "the essential shut down of the homeowners insurance market in that state."
Texas instituted its regulation, which has since been amended, after a high-profile lawsuit in that state resulted in a $32 million jury award against Farmer's Insurance Company. The award vaulted mold into the national spotlight.
The current high-profile mold suit is in California, where former Tonight Show personality Ed McMahon is suing his insurance company for $20 million. He claims a botched pipe repair resulted in a black mold infestation in his home, causing him and his wife to become ill and killing his sheepdog, Muffin.
