New Ga. Mold Guidelines Allow Limited Exclusions

Georgia Insurance Commissioner John Oxendine’s recent approval of new mold guidelines for property/casualty insurers is reportedly the result of extensive input from insurers doing business in the state.

“Several NAII members were actively involved in the mold task force, and were instrumental in providing Commissioner Oxendine with recommendations on how to craft reasonable mold guidelines,” said James Taylor, southeastern regional manager for the National Association of Independent Insurers (NAII). “The Commissioner’s final guidelines are a direct reflection of that input.”

Under the new guidelines, both personal and commercial property insurers could set sublimits or exclusions for mold remediation as long as they continue to provide minimum coverage, and if the cause of loss is an event other than fire or lightning.

Georgia’s new guidelines would also allow policies to limit or exclude mold on any commercial general liability policy written for a business with more than 25 people or revenues exceeding $2.5 million.

Insurers will be permitted to institute a $50,000 limit on personal-liability policies for mold claims, and liability coverages such as umbrella or excess policies would also be allowed to exclude mold.
Insurers will also be required to disclose to consumers at the time of underwriting that they retain the right to buy additional mold coverage, with deductibles not to exceed $150. Companies will still need to file forms with the department for approval.

Taylor pointed out that the guidelines are neither proposed regulations nor insurance department directives.

They should be treated as departmental information and given due consideration in any subsequent rate filings.

Mold is estimated to cost the insurance industry $13 billion, with most of the claims coming in Southern and Southwestern states.