“Companies price their insurance policies to handle hurricanes, tornados, and hailstorms that frequently strike Texas,” said Mark Hanna, public relations manager for the Insurance Council of Texas in the Journal story. “Companies were not prepared to deal with the high cost of mold claims and subsequent litigation that has jolted the industry as well as consumers.”
The Journal reported that mold claims in Texas grew from $420 million in 2000 to just over $1 billion in 2001. In 2002, mold claims exceeded $2 billion. The cost of mold claims peaked in July 2002, with insurers paying $215 million on 24,000 claims. Since then, the cost of mold claims has been declining with most homeowner policies now either limiting or excluding coverage for mold.
Publication date: 06/16/2003