Insurer, Fla. break ground over mold
Homeowners to get 'broad-based coverage,' state says

The Florida Department of Insurance and Florida Farm Bureau Insurance Cos. reached agreement Tuesday on mold coverage, one of the prickliest issues facing homeowners and insurers.

While both sides stress that this is only one case involving one company, it appears to be the first detailed guideline on this issue in Florida.

Under the negotiated settlement, the company will provide $10,000 coverage per incident and a maximum of $20,000 on a policy starting March 1, 2003.

Homeowners also can get optional increased coverage, for mold, wet or dry rot or bacteria, of $25,000 per incident and $50,000 maximum for an extra $60. For $90 more, they can get $50,000 per incident and $50,000 maximum.

''It is certainly a very reasonable settlement that will provide broad-based coverage to consumers,'' department spokesman Tami Torres said.

The company hopes the agreement will clarify a contentious issue.

''We think it is a fair settlement both to protect people who have claims and people who have to pay the premiums,'' said Rade Musulin, vice president of operations for the Gainesville-based company, which has about 100,000 policyholders statewide.

The case began in January, when the insurer asked the state for permission to limit mold coverage to $10,000. The state has received 238 requests from insurers wanting to exclude coverage or provide up to $10,000 worth, Torres said.

The department turned down the Farm Bureau companies' request in the spring because, it said, it wanted more information on mold. To get input, it held a series of hearings around the state, including one in Plantation.

At least 300 people showed up for the Broward forum, some claiming that mold had forced them from their homes and damaged both their health and their finances.

Insurance companies, concerned about the rapid spread of mold litigation, said there was no scientific basis for the claims. They want the state to limit claims they say could wipe out the industry, lead to higher premiums or possibly force them to stop writing policies in Florida.
Two companies, Farm Bureau and State Farm, not willing to wait for the department's ruling, appealed to the state Division of Administrative Hearings. And before the case could get to a judge, Torres said, the state and Farm Bureau had reached agreement.

A hearing, meanwhile, is scheduled for mid-January in the case of State Farm, which has nearly a million policyholders in Florida, where it and Allstate are the top insurers.

Said Torres: ``Until outstanding litigation with State Farm is resolved, the department is unable to take a formal position [on mold coverage].''