This is a hot topic in crawl space repair! In most cases, insurance companies won’t cover the encapsulation cost unless your crawl space had been encapsulated before any damage occurred. If you have no major damage, and are considering encapsulating your crawl space – even though this isn’t covered by your homeowners insurance, it is still a worthwhile investment to the overall health and value of your home.
It is important to understand that various situations can lead to crawl space damage, which is why insurance companies have a hard time determining the origin of damage such as water and mold. The key difference between these situations is whether or not the damage is sudden, unexpected, and out of the homeowner’s control.
FOR EXAMPLE: The temperature difference between your crawl space and the outside air will cause condensation if you live in a hot and humid climate. This condensation can build moisture overtime and, eventually, mold and rot.
Most insurance companies will only cover these damages if they result from an accident or natural disaster that was out of your control. The insurance company would consider it to be negligence on the homeowner’s part by not locating and reporting long-term damage sooner.
You may also experience unforeseen damages that can lead to high humidity
and water in your crawl space. For instance, pipe damage and flooding can happen unexpectedly and cause the same problems. This would more than likely be covered by an insurance policy because it was sudden & a point of origin can more easily be determined.
Why Encapsulate?
Encapsulating your crawl space involves sealing the area below your floor using white plastic. In this process, professionals utilize heavy-duty polyethylene to seal off your crawl space floor and foundation walls. A dehumidifier is installed in order to promote air circulation in the now moisture-free crawl space.
The encapsulation system prevents excess moisture, which minimizes potential risks such as pest infestation, mold growth, vermin structural damage, and bulk water. This provides many benefits to the overall health & value of the home. It also protects against extensive AND expensive future damage to the structure of your home that you would need to get repaired on top of the cost of encapsulation.
A lot of resources will tell you that crawl space encapsulation costs an average of around $5,500, with a range from $1,500–$15,000, depending on the work required. The actual cost, however, depends a lot on the conditions in your particular crawl space, and the size of your home. Sometimes, it can be even more expensive if there is prior damage to the crawl space that needs to be taken care of before encapsulation can begin. This is why most crawl space companies require an inspection of your crawl space before they can give you a quote. Most crawl space companies offer financing options as well, as the cost of encapsulation can be high for the average homeowner.
Insurance after Encapsulation
So you’ve taken the steps to protect your home and unexpected water damage occurs… Encapsulation of the crawl space will not prevent an instantaneous pipe burst or damage from occurring. In this kind of scenario, the insurance company will cover the costs needed to get your crawl space to its pre-loss condition since this was done before the event happened.
Put simply, if your crawl space was already encapsulated, insurance should cover the restoration cost.
Notably, the majority of insurance companies have preferred vendors who will do the repair work at a low price. This means they probably won’t pay the contractor who encapsulated your crawl space prior to the damage to fix it. Nevertheless, the insurance company may contact your contractor to get estimates on the encapsulation process and cost.
Afterward, they’ll inform you how much they’ll pay for the encapsulation.
Some water damage restoration companies are only trained for getting your damaged area dry. In other words, they’re not licensed in encapsulation or mold removal, so be sure you talk with your insurance company/agent regarding your preference for completing the necessary repairs.
You are NOT REQUIRED by law to have work completed by one of the insurance company’s preferred contractors. You may choose who you want to complete the necessary repairs being done to your home, including the original contractors if you were happy with their work.
Mold Damage & Your Crawl Space
Homeowners insurance will only cover mold or damage caused by mold if it grew as a result of a covered peril and occurred quickly. For example: A hurricane damaging your roof, allowing rain to come through and mold growth throughout the home, would likely be covered. Mold-related problems are only covered if they’re caused by sudden and accidental issues, which typically result from water damage caused by a burst pipe, improperly working air conditioner or something along those lines.
Most mold-related insurance claims are denied because the growth occurred over time and wasn’t caught quickly enough. Your policy has special guidelines for mold coverage, so it’s best to consult with your company or agent to determine what is and isn’t covered under your policy.
Most homeowners insurance policies have a maximum limit of $1,000 to $10,000 for mold remediation — which is used for removal and repairs.
You may be able to add an endorsement to your policy in high-humidity states. Florida, New Jersey, New York, North Carolina and South Carolina are currently the only states required to provide up to $50,000 per mold claim due to the region’s climate. Insurance companies often treat mold in crawl spaces as a maintenance issue because it takes time for it to occur — even though mold can realistically form in as little as 24 to 48 hours under the right conditions.
You can’t have mold without water, and water damage is one area where your homeowners insurance can start to get a bit foggy. If there’s standing water in the crawl space under your house, whether or not your homeowners insurance covers the cost of the damages or the repairs depends entirely on how the water got there in the first place.
Examples of Most Often Covered Water Damage
- The standing water is a result of a pipe bursting unexpectedly.
- The standing water is a result of a broken or faulty appliance that leaked into the crawl space.
- Your air conditioning unit malfunctions, causing a sudden flood of water that’s trapped in your crawl space.
Here are some other examples of standing water in your crawl space that aren’t covered by most policies:
- A small, unnoticed leak in the roof caused water to pool in your crawl space over a longer period of time.
- Standing water was left behind after a sudden rainstorm that caused flooding in your neighborhood.
- A pipe in your home bursts as a result of negligence or poor upkeep.
What Insurance Companies Cover Mold Damage?
Many insurance companies provide similar coverage for mold damage, removal and remediation, but it must’ve occurred suddenly, accidentally and due to a covered peril. It’s best to consult your insurance agent to see if your current policy protects against mold.
The editorial content in this blog is meant to be informational material and should not be considered legal advice. Please consult your insurance agent if you have an issue under your home and you are unsure about your coverage.
