Florida Okays State Farm Mold Policy Deletion

Florida Okays State Farm Mold Policy Deletion

NU Online News Service, Sept. 8, 2:04 p.m. EDT?State Farm Florida Insurance Co. has been given permission by state regulators to delete mold damage coverage from its homeowners insurance policies.

However, regulators also decided that the insurer must offer policyholders the option of adding mold coverage back in for up to the full policy limit, with an additional premium for the coverage.

It is unclear whether the Tallahassee-based Florida Office of Insurance Regulation will grant similar permission to other insurers in the state.

State Farm Florida, a subsidiary of Bloomington, Ill.-based State Farm Insurance Company, had sought to entirely exclude mold damage and add it back in only up to a maximum limit of $50,000, according Florida's Office of Insurance Regulation.

The OIR allowed State Farm to delete mold coverage from its homeowners forms, but also told the carrier to file and await approval of new forms and rates that offer mold coverage up to the full property limits of its homeowners policies. Until that filing is made and approved, the company cannot change any coverage presently in place, the OIR noted.

OIR director Kevin McCarty said, "We believe it was the clear intent of the legislature to give policyholders the right to obtain comprehensive insurance coverage. The statutes we cited in our arguments [in favor of full mold limits being offered] certainly set this standard."

"With this order, we have preserved policyholder rights for Florida homeowners and given State Farm a measure of predictability it needs to continue serving the Florida insurance market," Mr. McCarty added.

"We're pleased with the decision and we think it's a victory for consumer choice," noted State Farm spokesperson Tom Hagerty in a statement. State Farm had indicated that it would have had to considerably increase its previously announced 6.9 percent homeowners rate hike in Florida if it had not been able to exclude mold coverage.