Farmers Insurance Ordered to Pay $32 Million
(Tempe, AZ 07/02/2001) - Tens of thousands of homes each year experience some form of water related damage. Roofs leak . . water heaters burst . . plumbing breaks . . drains back-up . . fires are extinguished with water. By whatever means, water is getting into attics, duct work, ceilings, walls, behind cabinets and under finished floors. Absent any remedial intervention, that water develops mildew, mold and toxic mold.
. . . to Texas Homeowner
This story is not so much about Farmers Insurance as it is about HomeOwner Insurance Companies in general and how their claims handling practices address (or fail to address) the issue of Toxic Mold.
When a leak developed in the bathroom plumbing of Melinda Ballard's Texas home, she notified Farmers (her HomeOwner insurance company). Farmers diagnosed the damage and defined the scope, method and cost of repair. Shortly thereafter the Ballards began experiencing health problems. Those problems were traced to the Toxic Mold that had been allowed to develop inside the walls of her home because of improper repairs to the leaky bathroom plumbing. Farmers had declined to pay for any mold remediation.
Stachybotrys is a Toxic Mold. It is such a dangerous microtoxin that it is regarded by the military as an agent of "biological warfare". Physical reactions include nose bleeds . . vomiting . . hair loss . . diarrhea . . cognitive dysfunction and hearing loss. Experts feel Toxic Mold is becoming a greater problem because common construction materials, such as plywood and dry-wall, become mold friendly when wet. A bleach based solution can usually stop most mold development when applied directly to affected areas soon after having been dried. However, serious cases can be unstoppable.
Researchers at Texas Tech are working on a coating for new building materials they hope will prevent mold growth. However, any such developments are too late for Melinda Ballard. But for the $1,500 - $2,000 cost of mold remedial intervention (at the time of loss), her home will now have to be torn down. Even using the higher cost of $2,000 per claim, Farmers could have properly addressed the Toxic Mold problem in 16,000 water damaged homes rather than having to now pay the $32 Million judgement.
Mold Control Recommendations . . .
1] - Keep humidity level in house below 50% . . .
2] - Use air conditioner or de-humidifier during humid months . . .
3] - Be sure home has adequate ventilation, including exhaust fans in kitchen and bathrooms . . .
4] - Do Not carpet bathrooms . . .
5] - Remove and replace flooded carpets . . .
6] - Use mold inhibitors which can be added to paints . . .
7] - Use mold killing products to clean bathrooms .
Additional Toxic Mold Info . . .
The Center for Disease Control has published toxic mold information on-line. Review the CDC information by going to . . .
The Environmental Protection Agency has a study of Toxic Mold available on-line. Review the EPA study by going to . . .
Public Insurance Adjusters . . .
Considering the potential for down-line complications, it may be a good idea to consider hiring a Public Insurance Adjuster to represent your interests. While probably not cost effective on smaller losses, we suggest talking with a Public Insurance Adjuster whenever a loss involves water or when the damage causes a significant lifestyle disruption. Public Adjusters can level the playing field for you.
To learn more about HomeOwners Insurance Claims, go to www.ican2000.com/ussethome.html .
Future Press Releases . . .
Frank Thomas is a former Farmers Insurance Agent and was major factor in getting Insurance Reform Legislation approved by California voters in 1988. He is now writing a book giving behind-the-scenes glimpses at how the insurance industry tried to defeat proposition # 103. Frank is now a part of our I-Can Family. He will be serializing portions of his book to be incorporated into future I-Can Press Releases.
The Insurance Consumer Advocate Network is an InterNet based consumer advocacy effort designed to Increase Consumer Awareness as to Insurance Related Issues, Encourage Consumer Involvement with Insurance Related Efforts and Facilitate Consumer Contact with Pro-Consumer Entities.
The InterNet web site for the Insurance Consumer Advocate Network is www.iCan2000.com