'Skyrocketing' Costs

April 17, 2002

California Insurers Group Takes Aim At Mold Claims


Inman News Features

A spokesperson for a California insurance industry trade association today took aim at a bill that would require property and liability insurance policies to cover mold claims in the state after Jan. 1, 2003. Diane Colborn, VP of the Personal Insurance Federation of California, said the bill has the potential to disrupt the homeowner?s insurance market in the state and lead to much higher homeowner?s insurance rates.

The bill, SB 1763, was authored by Sen. Deborah Ortiz and will be heard by the Senate insurance committee April 16.

"Our members write approximately 35 percent of the homeowner?s insurance in the state, and we are urging a no vote on SB 1763 because the property mold coverage mandate on insurers will interfere with their ability to manage loss exposures. It is impossible today for insurers to continue to charge current rates yet be expected to pay thousands of incoming mold claims with such high dollar loss amounts," said Colborn.

Coldborn said insurers might place further exclusions on mold if mold claims costs continue to "skyrocket" in the state.

"We would like to see the (Department of Health Services) study on mold and cleanup completed before any new laws are passed. California should learn from and not replicate the mistakes of Texas," said Colborn.

Copyright: Inman News Service


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