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We have spent almost 2 years going back and forth with our insurance company about who is responsible for the mold problem in our house. Is it too late to file a lawsuit against all the possible responsible parties, including our own insurer?
Every state has a statute of limitations, which is commonly from one to three years from the date the problem is discovered. If your state has a one year statute of limitations, that means you only have one year to file a lawsuit. After that, your claim will be completely barred.
When facing a mold claim, all of the potentially responsible parties will usually blame each other and point fingers. Your insurance carrier may deny coverage rather than resolve the situation and maybe even intentionally “drag its feet” with the intention of letting the statute of limitations lapse. This is when filing a lawsuit may be your only option to move forward, and you want to make sure as soon as possible into negotiations that you know what your time limit is so you don’t miss the deadline. If your insurer has done something illegal – such as delaying the resolution of a claim until the statute of limitations runs – you probably have grounds to bring an insurance bad faith lawsuit against them.
A “bad faith” clam is based on the fact that insurers have a duty to handle all claims in a reasonable time and manner - in other words, in “good” faith. If an insurance company fails to act in good faith and pay a valid claim, a policy-holder can bring a claim for damages against the insurer. If the denial of your claim can be shown to have been unreasonable, you should be able to recover consequential damages, which is whatever you had to pay out-of-pocket because of the denial, as well as additional damages to compensate you for emotional distress. In some states, you can also receive punitive damages, which are meant to punish the insurance company as a deterrence from wrongfully denying similar claims in the future.
In many cases, depending on the language of your homeowners’ insurance policy, you may indeed be entitled to insurance coverage for the costs and liabilities associated with mold-related lawsuits. However, insurers often assert numerous defenses to mold-related claims, some of which are valid. For instance, there might be a “pollution exclusion” in the policy; insurers have argued, sometimes successfully, that toxic mold falls within the definition of “pollution.” Some courts, however, have rejected the application of the pollution exclusion to mold-related claims. Insurers may also attempt to deny coverage on the ground that an insured knew, or should have known, about the presence of mold in their homes. Again, this argument has met sometimes will success, sometimes not. And in some cases, if you are dealing with a policy that was written fairly recently, there might even be a specific provision in your policy that excludes claims related to mold.
It is always a good idea to contact an attorney with experience with mold claims as soon as possible to preserve your rights and make sure you have the best possible chance for the maximum recovery. |
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