Insurer, Fla. break ground over mold
Homeowners to get 'broad-based coverage,' state says
BY DALE K. DuPONT
The Florida Department of Insurance and Florida Farm Bureau Insurance Cos.
reached agreement Tuesday on mold coverage, one of the prickliest issues facing
homeowners and insurers.
While both sides stress that this is only one case involving one company,
it appears to be the first detailed guideline on this issue in Florida.
Under the negotiated settlement, the company will provide $10,000 coverage
per incident and a maximum of $20,000 on a policy starting March 1, 2003.
Homeowners also can get optional increased coverage, for mold, wet or dry
rot or bacteria, of $25,000 per incident and $50,000 maximum for an extra $60.
For $90 more, they can get $50,000 per incident and $50,000 maximum.
''It is certainly a very reasonable settlement that will provide broad-based
coverage to consumers,'' department spokesman Tami Torres said.
The company hopes the agreement will clarify a contentious issue.
''We think it is a fair settlement both to protect people who have claims
and people who have to pay the premiums,'' said Rade Musulin, vice president
of operations for the Gainesville-based company, which has about 100,000 policyholders
The case began in January, when the insurer asked the state for permission
to limit mold coverage to $10,000. The state has received 238 requests from
insurers wanting to exclude coverage or provide up to $10,000 worth, Torres
The department turned down the Farm Bureau companies' request in the spring
because, it said, it wanted more information on mold. To get input, it held
a series of hearings around the state, including one in Plantation.
At least 300 people showed up for the Broward forum, some claiming that mold
had forced them from their homes and damaged both their health and their finances.
Insurance companies, concerned about the rapid spread of mold litigation,
said there was no scientific basis for the claims. They want the state to limit
claims they say could wipe out the industry, lead to higher premiums or possibly
force them to stop writing policies in Florida.
Two companies, Farm Bureau and State Farm, not willing to wait for the department's
ruling, appealed to the state Division of Administrative Hearings. And before
the case could get to a judge, Torres said, the state and Farm Bureau had reached
A hearing, meanwhile, is scheduled for mid-January in the case of State Farm,
which has nearly a million policyholders in Florida, where it and Allstate are
the top insurers.
Said Torres: ``Until outstanding litigation with State Farm is resolved, the
department is unable to take a formal position [on mold coverage].''
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