By Iris Richmond. Concern about the consequences of mold contamination erupted last year after a jury in Texas awarded $32 million to a plaintiff. Many states are busy putting together legislation and task forces to address the fungi, while many insurers are placing caps on mold liability and inserting clarifying language in their homeowner's policies to exclude mold coverage even it results from a covered loss. California leads the way, with other states' efforts not too far behind.

  • California: New law creates The Toxic Mold Protection Act requiring the state to convene a task force to address mold issues and for the health department to develop exposure standards. A second law requires the state to perform a study on mold and publish the findings. Pending Bill 1173 provides for the identification of toxic air. State insurers have put a cap of $5,000 to $25,000 on mold coverage.
  • Alabama: The state's insurance department recently approved the Insurance Service Office's request to cap mold damages at $10,000.
  • Arizona: Pending Bill 1432 would establish a legislative committee to study mold contamination in depth before other legislation is proposed.
  • New York: Pending Bill 5799 seeks to create a toxic mold protection act, which appears to mirror California's.
  • Texas: While other states consider mold a maintenance issue, the Lone Star state is the only one that still permits insurance coverage for slow water damage, as long as damages are reported within 30 days of discovery.
  • Washington: Pending Bill 5933 would require the health department to develop educational materials about mold and other pollutants affecting indoor air quality.
  • BIG BUILDER Magazine, April 2002