Insuring for Household Hazards When You Have Mold Damage, Who Pays?

Mold—it’s an ugly four-letter word in more ways than one. Nobody wants to think about the fact that this fungus can be found anywhere where water leaks or drainage problems are present. Mold can cause serious damage to a co-op or condominium, like ruining drywall, and is believed to trigger numerous health problems in susceptible persons.

But when your home is contaminated by mold, and you just want it to go away, who pays for the damage and the cleanup? Is it the responsibility of the homeowner? Is it the cooperative board or condo association’s responsibility? Is it the next door neighbors’ responsibility if the water came from their unit and damaged yours? The answer to all of these questions is…it depends.

The co-op's umbrella or condo association's master policy, as well as the various governing documents, spell out what parts of the complex are covered and what parts are the shareholder or unit owner’s responsibility. Typically most insurance covers the co-op or condo building, any common property such as hallways, lobbies and shared terraces, etc., as well as liability insurance for the board and association. Whenever any kind of moisture is introduced into a building structure—prewar or brand-spanking-new—whether in the form of a major flooding event or just a minor leak, it brings with it the possibility of mold infiltration and all its attendant risk to property and health. Even if you have full homeowners and flood insurance, mold-related damage may not be included in your coverage.

To tackle mold from the bottom up, an ounce of prevention is worth a pound of cure, and being one step ahead of the nasty but nearly ubiquitous stuff is really the only defense against it—the longer you wait to deal with a mold issue, the more it may cost to correct it, and the less pity your insurance carrier is likely have for you.

Mold Exposure

Whatever the root cause, mold damage can be devastating. While the data isn’t definitive, strong anecdotal evidence suggests that mold spores in a home can contribute to a broad range of health issues, including eye irritation, congestion, asthma and other respiratory distress, skin rashes, and even mood and behavior problems, particularly in young children. Getting rid of mold can be a lengthy, expensive process—and standard homeowners insurance policies don’t always foot the bill.


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  • My co-op has mold inside the central air conditioners. Isn't this the responsiblity of the management to clean? There is water inside the units which apparently caused the mold. The maintenance crew will only change the filter but will not clean the unit or standing water. The manager told us it was our responsiblity. Please advise. Thank you...
  • hi. I wanted your advice on my situation. My upstairs neighbors shower leaked into my walls. The ceiling and parts of the wall are wet and the paint is starting to bubble and peel, I just painted (side note). I am worried about the repairs and the potential for mold in the wall, is that something the coop will remedy or is it up to me? How do you suggest going foward?
  • Just recently, I noticed black dots littered behind a painting on my walls which were bleeding (trails of moisture from the ceiling to the floor). When I removed a chair to investigate further, there was a plethora of black spots near the molding on the floor and at the crown of the ceiling. I immediately attacked with bleach but feel I should call in a professional. in the 10 years in my apt, I've never seen this before. I'm not aware of any pointing needed or what the root cause is. Should I call management or contact a professional first?