Mould after water damage: cover, limits and testing

Mould is not a cause of loss. It is always a consequence of one, and the whole of its insurance treatment follows from that single fact.

An insurer asking about mould is really asking two questions in sequence. What made the building wet? And was that a covered event? If the answer to the second is yes, the mould usually follows the cover — up to a limit. If the answer is that the building was wet because it is a badly ventilated bathroom in a Sydney winter, there is no insured event anywhere in the chain and there never was.

The causation chain

The middle row is where most real disputes live. The event was covered. The mould came anyway. The insurer says the mould is the result of the drying not being done fast enough and that is on you; you say the delay was the insurer’s assessment process. Both can be partly right, and the documentation from the first week decides it.

Why the sub-limit is so low

Australian home policies commonly cap mould at a figure that looks token next to the sum insured. There is a reason for it and it is not arbitrary: mould remediation cost is driven by how much porous material has to be removed, and that is essentially unbounded once it is in wall cavities and subfloors. Insurers cap what they cannot scope.

Two consequences worth acting on. First, the sub-limit is in your schedule and it is worth reading before you need it, because it is one of the few numbers in a home policy that varies wildly between insurers. Second, if remediation is going to exceed it, the economics change: the question stops being “what will the insurer pay” and becomes “what is the cheapest way to make this building dry and stay dry”.

The testing question, answered by a health department

There is an Australian industry that sells mould testing, and there is a government health department that has published its view on whether you need it. They do not agree, and the health department is the one with no commercial interest.

Read the qualification carefully, because it is not a blanket “never test”. NSW Health accepts that contamination may be in cavities or the ceiling, that indoor surfaces need inspecting to determine the extent, and that where you cannot find the source of the problem an occupational hygienist can help. What it does not accept is that an air sample test is a routine first step for visible mould.

Which is worth knowing when a quote arrives with a $250–$300 air sample test on it as a line item. Sometimes that is the right call. Often, on visible mould in a room you can see, it is not.

What NSW Health says to actually do

And the sentence that matters more than the method:

That is the whole of it. Surface cleaning a mouldy wall in a building that is still wet is a two-week solution. The reason structural drying costs what it costs is that it is the only part of the process that changes the outcome.

The prevention list, from the same source

NSW Health’s own list of actions that reduce dampness, reproduced because it is the most practical thing any Australian government has published on this:

• Run exhaust fans when bathing, showering, cooking, doing laundry and drying clothes.
• Open windows when the weather allows, to improve cross ventilation.
• Limit humidifiers, fish tanks, indoor plants and unflued gas heating.
• Repair water leaks and plumbing problems — burst pipes, a leaking roof, a blocked gutter.
• If water enters the home, completely clean and dry water-damaged carpets and building materials, and discard what cannot be cleaned and dried completely.
• For rising or lateral damp, keep weep holes and subfloor vents clear and get a building consultant to look at the damp course.

Note the fifth one. “Completely clean and dry” is doing all the work, and it is the difference between a restoration company with moisture meters and a fan from the hardware shop.

Common questions