No Winners In Texas Mold Insurance Debate

At last month’s meeting in Austin, it was determined that the proposal by the Texas Department of Insurance (TDI) staff to limit mold coverage by insurance companies was not a compromise that either consumer groups or insurers were willing to take. 

The 25-page staff recommendation called for placing a $5,000 cap on mold claims but giving consumers the option of buying additional coverage in amounts equal to 25 percent, 50 percent or 100 percent of their policy limits. You can view the entire text at www.tdi.state.tx.us/general/pdf/moldpetition.pdf.

Commissioner Jose Montemayor has also obtained information from TDI’s data call to the state’s five largest insurers showing the rise in the number and dollar amount of mold claims. Statewide, the average cost per policyholder per year for mold claims is $81.71. The average cost per mold claim is $38,138 in the state. 

According to the Associated Press, Sen. Carlos Truan, D-Corpus Christi, urged Montemayor to call the insurance industry’s bluff. “The insurance industry is engaging in its usual blackmail. We may as well call it what it is, threatening to stop writing homeowner’s insurance as it has hysterics over being asked to do its job of controlling and limiting risk.” He said it was highly unlikely that the insurance companies would be able to sustain a boycott of the Texas insurance market.

Denise Ruggiero, a lawyer for State Farm, said the proposal would not solve the availability and affordability crisis that mold has been created in the homeowner’s insurance market. “The state’s proposed solution requires every policy holder to pay for coverage they may not want or be able to afford and eliminates consumer choice with regard to mold coverage,” Ruggiero said.

Janet Ahmad, president of Home Owners for Better Building, said Montemayor should try to recover losses from the manufacturers of materials that predispose homes to mold growth and from the homebuilders who use the defective products. She also said that he should encourage companies to approach the mold issue from the standpoint of prevention and he should take disciplinary actions against insurance companies that do not handle claims in a timely manner.

But mandating coverage for mold claims also is unacceptable to most insurers because it eliminates a person’s ability to choose whether they want the coverage, said Jerry Johns, president of Southwestern Insurance Information Service. ”We feel like the entire issue boils down to consumer choice,” Johns said. Montemayor is expected to make his decision on the proposed plan or issue new guidance by early November.

Last month, Gov. Gray Davis signed two bills that makes California the first state to begin regulating toxic mold, but not, contrary to news reports, the first state to pass a toxic mold law.

“These bills represent some of the toughest environmental health laws anywhere in America,” Davis said in a prepared statement. Specifically, the laws:

Require DHS to: 

a) Adopt the permissible exposure limits if deemed to be feasible
b) Adopt guidelines to address the health threat posed by mold in indoor environments. The department may adopt alternative assessment guidelines applicable to facilities that primarily serve subgroups more at risk, such as young children and the elderly; 
c) Adopt identification and remediation guidelines for mold in indoor environments
d) Convene a task force for purposes of consultation regarding the above activities; 
e) Report to the Legislature by July 2003 on its progress in developing the guidelines; 
f) Review the guidelines at least once every five years and revise as necessary; 
g) Develop and make available public education materials about the health effects of molds and methods to prevent, identify, and remediate mold growth.

• Establish notification requirements regarding indoor mold for owners and tenants of commercial, industrial, and residential buildings, which would be in effect after adoption of any DHS guidelines.

• Require the Department of Consumer Affairs (DCA), after DHS guidelines are adopted, to report on the need for guidelines for mold-testing professionals and mold remediation specialists.

Yacobellis Elected President Of IAQ Association

Tom Yacobellis, president and founder of Buster Enterprises Inc. and the DUCTBUSTERS cleaning franchise, was elected president of the Indoor Air Quality Association (IAQA) during last month’s Annual Meeting & Exposition in Las Vegas.

A former board member of the National Air Duct Cleaners Association, Yacobellis joked to attendees that he’s “waited more than 10 years to become president of something–and finally it’s happened.” Among the goals he says he would like to accomplish during his two-year term: producing a new IAQ-related certification program each year, restructuring IAQA’s training course hierarchy, and making new alliances with industry organizations. 

Other election and membership-related news can be found in the Association Watch section on page 10.

The keynote speaker for this year’s meeting was Jeffrey May of J. May Home Inspections in Cambridge, Mass., and author of the new book, My House is Killing Me: The Home Guide for Families With Allergies and Asthma. He recounted for attendees his tales and experiences with the more “paranormal” indoor air quality cases he has investigated and solved. He also provided a compelling slide show of what some of the IAQ culprits were in these cases.

Paul Cochrane of Aerotech Laboratories also entertained and enlightened attendees with information on how to market their IAQ business. Cochrane, vice president of business development, has been called the mastermind of the company’s quick rise to the top of the IAQ laboratory market. He told attendees that marketing materials that focus on IAQ information can be a goldmine in company branding and name recognition. These items included newsletters, e-mail alerts, posters, guidebooks, and sponsorships and advertising.

Other meeting speakers included Dr. Richard Shaughnessy who gave attendees an update on the new guidelines for healthy home building that is currently in development through the American Lung Association. He told attendees that he expects a new draft for review to be completed by the end of the year.