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The fear of mold claims was engendered in the insurance industry by the trial court decision in Ballard v. Fire Insurance Exchange (Texas District Court, Travis County, June 1, 2001). The decision encouraged a flood of “toxic mold” cases in Texas and across the United States.

The case began in 1990 when Ms. Ballard bought a large house in Dripping Springs, Texas, for $275,000 at a foreclosure sale. The main house was approximately 7,400 square feet and had serious physical problems. She began insuring the house with FIE, a member insurer of the Farmers Insurance Group, for $313,000 on the house and $187,800 for the contents. Ballard made multiple claims for water leaks and damages caused by ineffective plumbing.

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