| Author |
Message |
alan jackson
Registered User
Username: Ajackson
Post Number: 118
Registered: 12-2000
| | Posted on Monday, July 01, 2002 - 11:17 pm: | |
This is a test of the emergency mold network. This is only a test. Can you say stacky backy? |
JackCash
Registered User
Username: Jackcash
Post Number: 14
Registered: 6-2002
| | Posted on Sunday, June 30, 2002 - 8:33 am: | |
There is a little blurb in the Houston paper on Mold but no mention of the arrests.
http://www.chron.com/ |
Chuck Deaton
Member
Username: Chuckdeaton
Post Number: 33
Registered: 3-2002
| | Posted on Saturday, June 29, 2002 - 11:37 pm: | |
Here is the URL for a company that will help to sort the wheat from the chaff.
http://www.mold-inspectors.com |
Dale Strain
Registered User
Username: Catmandale
Post Number: 18
Registered: 1-2002
| | Posted on Saturday, June 29, 2002 - 11:06 pm: | |
I guess the biggest surprise is not that it was done...but that they were actually caught. And may even be punished. What a concept. |
JackCash
Registered User
Username: Jackcash
Post Number: 13
Registered: 6-2002
| | Posted on Saturday, June 29, 2002 - 7:36 pm: | |
" The defendants allegedly served as homeowners, independent sub-contractors, vendors and service providers in filing claims, repairing the damage and selling the homes to each other to repeat the process. Homes in the greater Houston area, Bay City and Austin were used in the insurance fraud scheme......"
==========================
It`s about time....better late than never. |
Linda Asberry
Moderator
Username: Linda
Post Number: 36
Registered: 12-2000
| | Posted on Saturday, June 29, 2002 - 6:23 pm: | |
Alan, here's your links:
http://www.house.gov/conyers/mold.htm
http://www.moldupdate.com/legislation.htm
The first is the proposed bill and the second is the link to legislation of mold in all the individual states.
Ghost, I don't know if they are one and the same or not and I would not speculate in the event they are not and could harm an innocent person. Word on the street is that many more arrests are coming.
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Ghostbuster
Registered User
Username: Ghostbuster
Post Number: 300
Registered: 12-2000
| | Posted on Saturday, June 29, 2002 - 3:20 pm: | |
Linda, that TDI story names a Daniel E. Terry being indicted. Is this the same Danny Terry of Sugarland, Tx that owned a small independent adjusting shop that was affiliated with NCA? |
alan jackson
Registered User
Username: Ajackson
Post Number: 117
Registered: 12-2000
| | Posted on Saturday, June 29, 2002 - 11:38 am: | |
Check out moldupdate.com. There is a new story posted. Seems that a new Federal Mold Bill has been introduced by Rep.Conyers. This site has the entire bill in PDF format.
Maybe someone can post a link to this story. |
Linda Asberry
Moderator
Username: Linda
Post Number: 35
Registered: 12-2000
| | Posted on Saturday, June 29, 2002 - 10:45 am: | |
SEVEN ARRESTED IN HOMEOWNER FRAUD CASE
Please take the time to read this news release from the Texas Department of Insurance
http://www.tdi.state.tx.us/commish/nr06272a.html |
JackCash
Registered User
Username: Jackcash
Post Number: 12
Registered: 6-2002
| | Posted on Saturday, June 29, 2002 - 9:11 am: | |
Tom I looked at a screwy mold claim yesterday, It was probably less than 20 sguare feet of Mold. There have been five adjusters and the policyholders have now exhausted $50,000 in ALE after being out of da house for 10 months. The remediators charged $49,000.00 to strip one knee wall down to the studs and paint it with some anti fungal gook paint. They ran their silly reverse flow fans and drank all the policyholders beer. We have not even got to the rebuild of the home or the contents which have been estimated at about another $70,000. The FBI probably needs to set up a Mold sting house and put a few of these so called remediators in jail where they belong. They are well orginized purveyors of Insurance fraud. plain and simple. The losses are astounding and we as adjusters have an obligation to report this fraudulent activity. |
Tom Strickland
Registered User
Username: Toms
Post Number: 41
Registered: 12-2001
| | Posted on Friday, June 28, 2002 - 7:29 pm: | |
In the first place Has there been a "new" policy or a change in the policy wordings out there that covers mold,etc, In the Lone Star state, Barrett v.Farmers wrote the coverage!!!!!!!I.M.H.O. |
mark salmon
Registered User
Username: Olderthendirt
Post Number: 201
Registered: 12-2000
| | Posted on Wednesday, June 26, 2002 - 11:24 pm: | |
the insured has an obligation to mitigate, there goes 75% or more of all mold claims |
alan jackson
Registered User
Username: Ajackson
Post Number: 115
Registered: 12-2000
| | Posted on Wednesday, June 26, 2002 - 10:50 pm: | |
Can we talk about how to defend a mold claim? The biggest mistake the Insurance companies made was to start paying these things. I think I have the perfect defense for most mold claims. However, before I throw my 2 cents in, Let's here from some of you. I found out that all we had to do was scream mold and these guys always paid. They paid claims that never should have been paid.
Mr. Flynt and the gang have all yelled education is the key. I must agree. Most of the adjusters that I delt with were not educated or up to speed on these things. Each company should adopt it's own standard. EPA, C.I.H. etc.. and apply them.
If I adjust a claim and there is less than say 60 square feet of ( visable ) mold then just write up the claim and go on. If more mold grows then it should be denied as the insured failed to properly mitigate their damages. The lack of an adequate inspection was always a good place to draw blood. The adjuster didn't look in the attic, or crawl under the house.
Enough rambling for now. Let's here what others have to say on the subject. |
Ghostbuster
Registered User
Username: Ghostbuster
Post Number: 299
Registered: 12-2000
| | Posted on Wednesday, June 26, 2002 - 8:54 pm: | |
Don't think anything of it, Alan. When it comes to Adjusting, you can always come back. There are a variety of adages to pick from to placate oneself, but I won't bore you with them.
But...to atone, would you mind sharing some war stories with us? |
Linda Asberry
Moderator
Username: Linda
Post Number: 33
Registered: 12-2000
| | Posted on Wednesday, June 26, 2002 - 6:53 pm: | |
Alan, sometimes you just have to try it. However, I would hope you had a contract. I would hate to think they left you high and dry.
Since you now know all the adjusters' pitfalls, hopefully you won't fall in one.
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joseph m lombardo jr
Registered User
Username: Jlombardo
Post Number: 25
Registered: 1-2002
| | Posted on Wednesday, June 26, 2002 - 5:48 pm: | |
Hey Alan---WELCOME HOME------just think of the experience and the new tricks "THEY" use that you now know about......remember , pay backs are hell.... |
alan jackson
Registered User
Username: Ajackson
Post Number: 114
Registered: 12-2000
| | Posted on Wednesday, June 26, 2002 - 4:56 pm: | |
It's time I came clean. I had to say good bye to my plaintiff lawyer buddies. They owe me close to 70k. I should have known. You can never trust a lawyer. Time to get back to my adjusting roots. I helped the lawyers settle alot of mold claims. Not one insured / client ever fixed their house. They just bought new cars and such.
I hope the brotherhood and sisterhood of adjusting can find it in their heart to one day forgive me.
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Clayton Carr
Member
Username: Clayton
Post Number: 69
Registered: 11-2001
| | Posted on Tuesday, June 25, 2002 - 12:10 am: | |
Percentage deductibles are a regular fixture on the commercial side, especially on very large accounts.
5% was not uncommon 20 years ago, including physical damage ACV for heavy fleets.
Today, it is not uncommon to see SIR (self insured retention) at first dollar - as a form of deductible - of six figure multiples; where large commercial accounts have their own risk management a/o claims / safety departments.
Much of the "carriage trade" high value homeowners on my side of the St. Lawrence have deductibles starting at $10K, with appropriate premium credits for additional mutliples of $5K.
This seemed a great way for the carriers to have insureds share in the risk. However, in the last 2 to 3 years a growing problem is in having notice of the claims, and an increasing tendency for the losses thought to be under deductible mushrooming due to lack of expertise of the policyholder in controlling the losses with proper remedial action for clean up etc.
Insurers are now grasping in how to "write in" a requirement of the policyholder to report all claims; not just those where indemnity is sought.
With underwriting considerations based partly on the number of claims reported, as opposed to just the amount of claims paid; it is a different than some jurisdictions where people will report claims enmass when a storm goes through their neighbourhood, just to have an adjuster / estimator come out and see if they can find damage. |
Linda Asberry
Moderator
Username: Linda
Post Number: 32
Registered: 12-2000
| | Posted on Monday, June 24, 2002 - 10:44 pm: | |
Percentage deductibles aren't new. They have been around for well over a decade. You can buy them down but at a reasonable great expense.
Most deductibles are 1% so I'm not sure where the 25%....are coming from. I suppose you could choose to have one that large for wind, hail, etc. but not many.
(Message edited by Linda on June 24, 2002) |
D Wong Whey
Registered User
Username: Dwongwhey
Post Number: 158
Registered: 10-2001
| | Posted on Monday, June 24, 2002 - 3:35 am: | |
With the newest percentage deductibles, the insurance carriers may well be paying only 75% of a fire loss, hurricane loss, hail loss or mold loss.
What may be considered a consequential loss in Texas may also well be considered an exclusion from coverage in a vast majority of other states. |
JackCash
Registered User
Username: Jackcash
Post Number: 11
Registered: 6-2002
| | Posted on Sunday, June 23, 2002 - 9:29 pm: | |
Yes, The need for flood insurance is somewhat of a given, in a flood. |
John A. Postava
Registered User
Username: Johnp
Post Number: 34
Registered: 12-2000
| | Posted on Sunday, June 23, 2002 - 6:45 pm: | |
I agree with Jack that the risk factors (and loss ratios) of the 1980's are history. If mold is not controled by policy limitations or exclusions (which it is in many policies - notwithstanding the very fact that many of the companies whose very own policies exclude or limit mold-related claims are just "paying")all of our HO premiums will double in the next few years. And, the companies we will have to choose coverage from will be down to only a brave few.
I do, however, disagree with the statement that "flood is a covered loss" (under an HO policy). We live in Florida and if a hurricane pushes 2 feet of water through my living room (without a wind-related opening), I better darn well have a flood policy or I am SOL. |
JackCash
Registered User
Username: Jackcash
Post Number: 10
Registered: 6-2002
| | Posted on Sunday, June 23, 2002 - 10:45 am: | |
The bottom line is that mold damage is a covered conseqential loss, as interpreted by common law. The insurance policy is the governing instrument for such coverage and adjusters simply calculate covered damages. I don`t like flood damage, however they are also a covered loss.
Opinoin`s as interesting as they may be are somewhat un-important in the overall scheme of things that be. The policy is written to indemnify the insured against loss.
Insurance companies understand this and set rates based upon the probability of claims.
Mold is simply an issue that caught them with their pants down.
Now they all run to the legislative branch of the government to protect their war chest, when in fact all they ever needed to do was remove ambiguity from the policy. I predict Mold will continue to spread and these limitations for its removal will be overturned, as they should be.
If a home burns we cover the loss, not 25 % of it. What is next ? 25% of a fire or 25% of a hurricane or hail loss.
The companies took the bet and are responsible for the damages, they are also responsible for the premiums which are based upon current risk factors. The risk factors of the 19 eighties are history. |
Ghostbuster
Registered User
Username: Ghostbuster
Post Number: 298
Registered: 12-2000
| | Posted on Saturday, June 22, 2002 - 4:25 pm: | |
Another significant "they" is the media.That's right, those harbingers of misery with their coifured hair and stylish blazers intoning from the moral high ground.(Ratings! We gotta have ratings! Maybe there's a Pulitzer Prize in this story!)
I offer from the 'hallowed', (or is that 'hollow'?), pages of the June 20, 2002, USA Today, page 15A, the banner headline, 'Mold getting a costly hold on homes'. There are three full color photos of the cow eyed, Mr & Mrs Hammond camping out in the backyard of their Seabrook, Texas 1-story, brick veneer, 3-tab comp, 4/12 pitch, ranch style, tract house. It starts out 'When Beverly Hammond discovered black and green mold growing in her hall closet last fall, she wanted her family to evacuate the house immediately.'
This is the kind of story line the media can feast on for years. It's got all your winning elements for long term ratings boost. We got your; 1) Killer fungus, 2) Pitiful victims, (those with mold and those paying for the mold in their premiums), 3) More potential victims reading or seeing the story that are always needed for stirring up mob psychosis, 4) Good guys in the form of the heroic contractors in their white suits and masks, 5) Hired guns in the form of lawyers in expensive suits that are needed for important sound bites, 6) and last but not least, the evil insurance ogre to round out the plot.
It's a complete award winning story. What more could you want? It's a combination of the fifties el-cheapo horror movies and corporate conspiracy. This is a genuine TV and Print feeding frenzy. It's times like this that make me proud to be a 'Merkin'!
Now, if we can just put a script together and sell to the movie industry...should we do a moldy sex-comedy or a courtroom drama or a sci-fi horror venue? And, we need a title...'The Fungus That Ate Texas', 'Moldbusters', 'Melinda Ballard Does $32 Million'...c'mon people, THINK!
This is really great stuff. You should be far more appreciative than you are...
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Clayton Carr
Member
Username: Clayton
Post Number: 68
Registered: 11-2001
| | Posted on Friday, June 21, 2002 - 11:30 pm: | |
Jim, you have invested a lot of time - and taken a lot of space - to make a point.
Who are the "they"? In my view "they" are a few with a loud message - I think the core is plantiff lawyers and remediation contractors, who have seen a roller coaster emerge and they want the ride.
I do not see adjusters as part of the "they".
I was going to reflect on each story you posted, but the general themes are the same through all of them - consumer savvy and media festered paranoia.
Certainly the effects will be cost driven and great pressure on the supply of product - an economic cycle not uncommon in other industries with other products.
We, adjusters, are stuck with the effects - if mold exists and is drawn by wording or its' interpretation into coverage - it must be dealt with. As the dilemma worsens, carriers have only two choices - attempt to charge an appropriate dollar or withdraw their product.
Have we not seen this picture in another frame? Look at the pressure on the CGL back about 15 years ago, as carriers scrambled and some sank over the "long tail issues". Look at the ongoing pressures on auto physical damage and liability over the past 20 years, when no fault was lobbied to replace tort in many jurisdictions. Look at Florida where property carriers took severe beatings for years before withdrawing. Now they have the likes of the NFIP and FWUA to fill in the void areas that traditional carriers retreated from.
Mold will create the same unpleasant cycle and when the red pen comes down to complete the circle as it runs out of ink, another pen or two will emerge, as the next undefined cycle starts.
I do predict some radical changes in how formerly mediocre water losses are dealt with, and I would be surprised if those changes are not mandated very soon. No longer can that type of formerly straightforward loss be casually dealt with by the telephone adjuster. I have no sympathy for the carrier that does not mandate that each such loss be given priority treatment that includes an immediate site visit by an experienced adjuster who has company instructions to immediately initiate specified water remediation processes with appropriate vendors.
I also don't doubt that carriers are having their actuaries start a run on structure history. In years gone by the suspect underwriting risk was 25 or more years old - suspect of having outdated mechanical systems (heating / wiring/ plumbing). These saw the greatest level of loss control dollars (aka inspections)to determine appropriate upgrading. Now, it would be interesting to see a spreadsheet on the ages, type of construction, ventilation systems, etc., of the mold affected homes. Prudent carriers would also soon be doing a claims audit on the mold files to determine what has already been suggested in these forums - what went wrong the first time the first three adjusters dealt with the file; but more importantly looking at the time lines associated with all dealings with the homeowners and tying that all in with the spreadsheets previously mentioned.
All in all, lots of opportunity and challenge for property adjusters; but again I stress "we" did not create, nor do I think "we" fueled the issue, but we are the ones that can do our best to help carriers through this cycle.
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Roy Cupps
Board Administrator
Username: Admin
Post Number: 148
Registered: 1-1997
| | Posted on Friday, June 21, 2002 - 1:16 pm: | |
Please consider posting a short description about the article and a link to the article. Also, links to some of the articles listed here can be be found on the CADO Mold Page, both in the "Mold Claims in the News" and Q&A sections. I'm concerned about copyrights. Someone the other day posted an article from a newspaper site that was reserved for their members.
CatAdjuster.org An Adjuster to Adjuster Community
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Jim Flynt
Registered User
Username: Jimflynt
Post Number: 362
Registered: 6-2001
| | Posted on Friday, June 21, 2002 - 12:00 pm: | |
Mold cases could have a rotten effect
By Bill Summers
San Antonio Express News Thursday, October 18, 2001
Mold-related cases are growing faster than spores on a month-old pizza. Mold has been around forever, but the explosion in mold-related cases is a far more recent development.
Why this sudden interest in the lowly mold spore? Perhaps it has something to do with a $32 million jury award to an Austin-area family in their suit against Farmers Insurance. This case catapulted "toxic mold" into the spotlight and a feature article in the New York Times magazine. The fact that the judge refused to consider health-related claims citing lack of scientific proof was downplayed in favor of photos featuring people in biohazard suits.
The lawsuit machine is already whirring into action. Plaintiff law firms across the country are forming "mold teams" to prospect for cases.
For now, personal injury lawyers have honed in on the deepest pockets, insurers, as their primary target. Why should we care? We should care because these lawsuits will come with a steep price tag for Texans.
According to the Insurance Information Institute, Texans already pay the highest homeowners insurance premiums in the country — a whopping $879 annually. Premiums are expected to increase even more as the cost of mold-related litigation is passed on to homeowners.
Texas' top insurance regulator said homeowners insurance rates could increase by 10 percent to 11 percent. Property insurers predict premiums could increase by as much as 80 percent for some policyholders. Allstate Insurance Co., the third-largest property insurer in Texas, has quit selling policies for homes with a recent water damage claim fearing mold growth. Farmers and Progressive also have stopped selling any new policies because of concerns over water and mold-related claims. Other large insurers are reducing coverage.
And this is only the first round. Why stop at insurance companies?
Who's next? The homebuilder who constructed the home? The building material manufacturer who produced the materials for the home? The supplier who sold the building materials? The real estate agent who sold the home?
Pick any one or combination of these parties and the results will be the same — Texas homeowners and homebuyers will suffer. Texans will see housing prices climb as the housing industry takes costly measures to protect itself from litigation or faces outrageous settlements and legal fees.
Seem far-fetched? It's no more far-fetched than the current situation in which lawsuits and hundred thousand dollar claims are being filed when no science exists proving mold causes health problems. According to the Centers for Disease Control and Prevention "a causal link between the presence of the toxic mold and these conditions (unique or rare health conditions) has not been proven."
But, as we've seen before, proof is not always a necessary component to litigation. Never is this more evident than when personal injury lawyers see a golden opportunity to mine an entire new cause of action.
It may be too much to ask of those who stand to mine mold for profit, but those of us who stand to lose should examine the facts and before we allow mold litigation to proceed unheeded and unquestioned.
Let's make sure we know what the problem is. While the effects of mold on an individual are unclear, the effects of mold-related cases on the rest of us are clear and well-documented: We all pay.
Bill Summers is president and founder of the country's first Citizens Against Lawsuit Abuse group in the Rio Grande Valley.
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Jim Flynt
Registered User
Username: Jimflynt
Post Number: 361
Registered: 6-2001
| | Posted on Friday, June 21, 2002 - 11:55 am: | |
Fungi phobia
The cover shows a woman in a white biohazard suit standing in front of a staircase, her face obscured by a respirator mask. "Lurking, Choking, Toxic Mold," it says, with "Mold" in giant type, spanning the full width of the cover.
Inside, under the heading "Haunted by Mold," a blurb summarizes the plot: "It grows in the walls. It chokes your child and renders your husband senseless." In short, it's your "worst nightmare."
This is not a horror novel. It's the cover story of the August 12 New York Times Magazine.
Author Lisa Belkin describes "toxic mold" infestations that cause families to flee their homes in terror, leaving behind all their possessions. The symptoms she mentions include rashes, dizzy spells, vomiting, asthma, pulmonary hemorrhaging, hearing loss and "devastating cognitive failure."
Belkin tells the story of Melinda Ballard, a wealthy Texas woman who was awarded $32 million in damages after suing her insurer for failing to take a mold infestation in her mansion seriously enough. Ballard claims exposure to mold toxins so impaired her husband's memory and thinking that he was asked to leave his job as an investment adviser. Now he is "more like her child than her husband."
Anxious to avoid such a fate, Belkin dons a respirator mask when she visits Ballard's abandoned home and, afterward, throws out everything she wore there "so that mold spores that might have settled on my clothing won't contaminate everything else I own." She seems to view the mold as an insidious, virulent pathogen that messes you up while messing up your house -- sort of a cross between Ebola and termites.
Sprinkled through the article are details that undermine that portrayal. Belkin concedes, for instance, that many of the symptoms blamed on mold "can also be spread by suggestion and word of mouth." And she notes that the judge who heard Ballard's lawsuit "disallowed all medical evidence, saying that there was not sufficient epidemiological research directly linking health problems to mold."
In fact, according to the U.S. Centers for Disease Control and Prevention, the evidence that molds can cause "unique or rare health conditions such as pulmonary hemorrhage or memory loss" is limited to a "very few case reports," and "a causal link between the presence of toxic mold and these conditions has not been proven." Far more common are complaints of "hay-fever-like allergic symptoms." In addition, "certain individuals with chronic respiratory disease ... may experience difficulty breathing," and "individuals with immune suppression may be at increased risk for infection from molds."
The CDC's take on mold is not nearly as alarming as Belkin's account. The government's disease controllers do not even buy her distinction between the ordinary, omnipresent mold that we inhale all the time and the varieties that supposedly make people cough up blood and lose their memories.
"It is not necessary," says the CDC, "to determine what type of mold you may have. All molds should be treated the same with respect to potential health risks and removal."
So who are you going to believe: the CDC or the plaintiffs, trial lawyers, mold remediation contractors and maverick physicians with whom Belkin sides? Far be it from me to suggest that the government's experts are always right. But if anything, public health officials tend to err on the side of alarmism, the better to increase their budgets and cover their behinds.
Then, too, the toxic mold scare has all the earmarks of a bogus menace: nonspecific symptoms that could be coincidental or psychosomatic; post hoc, ergo propter hoc reasoning; the substitution of anecdotes and faith for hard data; and self-interested players who insist we can't afford to wait for more evidence.
One of the lawyers who is cashing in on the scare tells Belkin he is sponsoring a study aimed at bolstering the case against mold. He has hired researchers to conduct medical interviews with the tenants of a mold-infested California apartment building where some of his clients live and compare their responses to those of tenants in a "control" building without mold problems.
Chances are this study will find more health complaints in the building where tenants are already convinced that the mold on their walls and ceilings is making them sick. But what exactly is that supposed to prove?
It's the sort of question a sharp reporter might have asked -- if she weren't so worried about the spores on her clothes.
(Source: Creators Syndicate, Townhall.com 8/21/2001) |
Jim Flynt
Registered User
Username: Jimflynt
Post Number: 360
Registered: 6-2001
| | Posted on Friday, June 21, 2002 - 11:49 am: | |
Mold becomes toxic issue to homeowners, insurers
HAZARD COULD COST BILLIONS IN CLAIMS, SUITS
By Deborah Lohse
San Jose (CA) Mercury News
If you find it harder to get a homeowner's policy next month, you could blame mold.
Yes, mold.
State Farm, the largest insurer in California representing 22 percent of the market, decided last week that it would no longer write new homeowner policies in the state starting May 1. While that's partly due to past losses, it's also in large part due to the rising cost of mold-related claims.
Across the country mold has become a toxic problem, with homeowners, renters and building tenants alleging that a severe form of the fungus in their homes or offices is causing symptoms from allergies to lung bleeding.
For insurers, the issue threatens to become their next asbestos: a health hazard they'd never anticipated that could potentially cost billions of dollars in both claims and lawsuits.
For consumers, the issue is likely to increase the cost of homeowners insurance, already poised to go up as much as 25 percent for reasons related to past underpricing and rising construction costs. In Texas, which has had the most claims increases in the nation, rates have already nearly doubled for many homeowners.
In California, where the rise in claims comes second only to Texas, insurers are scrambling to stem their losses from mold.
Covering cleanup
Currently, most insurers in the state cover mold cleanup if it is part of a claim for sudden and accidental water damage, such as a pipe bursting. Most insurers exclude mold if it's not part of a water damage claim, such as mold that has grown over years. Allstate, the third-largest insurer in the state, in January capped the amount it will pay for mold cleanup at $5,000, even if it's part of a water-damage claim.
More than 200 insurers have now applied to the state's insurance department for permission to further restrict mold coverage, leaving out mold caused by faulty maintenance by the homeowner or even in some cases mold from water damage.
A bill making its way through the state legislature would essentially require insurers to keep the level of coverage that's now standard, and forbid many requested restrictions. The bill, despised by the insurance industry, passed the Senate insurance committee Monday and now must be approved by the Senate and Assembly to become law.
State Farm says its moratorium on new policies is temporary but indefinite. A spokesman said it is not a reaction to the proposed legislation but aims to avoid further losses until it rebuilds a financial cushion. State Farm has 1.5 million home policyholders in California.
The reason for the explosion of mold claims is a matter of bitter debate. Some consumer lawyers and activists blame certain new construction materials such as stucco, mold-friendly glue for wood floors, recycled newspaper used as a backing for sheetrock, and impermeable vinyl wallpaper. Some claim that newer energy-efficient buildings are airtight, which doesn't allow water to dry.
Insurers say consumer lawyers have invented an epidemic and have exploited generous insurance laws in states like Texas, where insurers until recently would cover even costs from longstanding mold.
Still, mold has its high-profile victims, including entertainer Ed McMahon -- who blames the fungus for sickening his family and killing his dog Muffin -- and Erin Brockovich, the famous legal assistant who helped win hundreds of millions of dollars from PG&E over environmental contamination.
Water-damage claims involving mold are soaring.
Farmers Insurance, the second-largest insurer, is getting 800 such claims a month in California, up from 200 earlier in the year. State Farm said the average water-damage claim for the region that includes Silicon Valley was recently nearly $3,400, up from $2,300 in 1999.
Very expensive
Mold is an especially expensive problem for insurers for many reasons. For one, they are more often evacuating homeowners during mold cleanup and paying for temporary housing to avoid allegations of endangering health. Also, contractors who don't want to be sued over their own work sometimes won't repair water-damaged homes unless their work is inspected by so-called industrial hygienists. Such inspections can cost $3,000 to $5,000 apiece, said Robert Hartwig, chief economist for the Insurance Information Institute.
``The expenses expenses associated with adjusting the claim can outstrip the cost of paying the claim itself,'' said Hartwig.
Emanuel Enes, a San Jose claims team manager for State Farm, said he's seeing a marked increase in public awareness about mold, including some paranoia. For some policyholders who discover mold, the fungus is blamed for ``every ache and pain, even though they might have had it before the damage.''
Skyrocketing rates
Already, mold is contributing to skyrocketing insurance rates for home and apartment or condo builders, who sometimes get sued years down for allegedly faulty construction that causes mold. Some insurance brokers report that liability insurance costs for construction clients have gone up 500 percent or more, while others have difficulty finding coverage at all.
The mold surge comes as California homeowners are already facing increased homeowners rates of 5 percent to nearly 25 percent. Allstate has recently requested a 22 percent increase in homeowners rates.
*******************************************
MORE ON MOLD
Health complaints associated with mold range from allergies to lung bleeding, especially for children or those with weak immune systems. There is no practical way to eliminate all mold and mold spores indoors, but the way to control mold is to control moisture:
Reduce humidity by venting bathrooms, dryers and other moisture-generating sources to the outside; using air conditioners; increasing ventilation; and using exhaust fans whenever cooking, dishwashing and cleaning.
Clean and dry any damp or wet building materials and furnishings within 24 to 48 hours.
Clean mold off hard surfaces with water and a Borax-based detergent, and dry completely. Absorbent materials, such as ceiling tiles, that are moldy may need to be replaced.
Prevent condensation. Reduce the potential for it on cold surfaces (including windows, piping, exterior walls, roof or floors) by adding insulation.
In areas where there is a perpetual moisture problem, do not install carpeting.
(Source: San Jose Mercury News 4/23/2002) |
Jim Flynt
Registered User
Username: Jimflynt
Post Number: 359
Registered: 6-2001
| | Posted on Friday, June 21, 2002 - 11:36 am: | |
The Fungus That Ate Sacramento
Mary Ellen Egan, Forbes 01.21.02
How mold grew from little black specks into a fee-producing tort.
Alexander Robertson built a tidy law practice in California suing contractors and insurance companies for construction defects. But he really hit the jackpot in 1995. Clients complained that some slimy black stuff in their house, commonly called mold, was making them sick. Now Robertson is raking in millions in fees from mold litigation: He sues contractors and insurers, claiming that mold in his clients' houses or apartments is causing everything from headaches and dizziness to neurological damage. His firm has pending about 1,000 of the estimated 10,000 mold suits piling up.
Line up, tort lawyers. This could be the next asbestos. Yes, there's a bit of difference: Asbestos fibers are known to cause disease and death. Whether household mold can do so is, to put it charitably, a matter of debate. But that hasn't slowed the litigation over mold. Explains Robertson, "Juries look at anecdotal evidence. They don't require 100% proof."
Mold is the visible growth of any of 100,000 species of fungus. These organisms are everywhere, indoors and outdoors. Indoors, their spores can show up in showers, inside walls, on ceilings--wherever there's plenty of water and a food source such as cellulose, a component of wallboard. There's no question mold can damage property.
There's also no question that certain species of fungus can invade the human body, sometimes fatally. Patients with serious fungal diseases tend to be debilitated from other causes or have weakened immune systems.
But can household mold make you sick? This is where the legal battle is being fought. Enough mold can provoke an allergic reaction, such as watery eyes, scratchy throats and headaches, among certain people. Certain types of mold, like aspergillus and stachybotrys, contain a mycotoxin that can be fatal in extremely rare cases. Mycotoxins occasionally poison people who eat moldy grain, or farmworkers in undeveloped countries who inhale extraordinary amounts over long periods.
Robertson was heading to trial on a construction-defect case in 1997 when he got his first taste of mold's legal possibilities. He was representing an unnamed actor and his wife who maintained that shoddy materials had allowed mold to grow within the walls of their Malibu home and that the fungus was causing headaches and fatigue. He sued the home's builder, the subcontractors and the insurance company that sold the couple their homeowner's policy.
On the eve of the trial the Centers for Disease Control & Prevention coincidentally published a report on whether mold was responsible for instances of bleeding lungs in eight infants in Cleveland. Epidemiologist Ruth Etzel wrote that the sick children were more likely to live in homes with stachybotrys than were children from a control group. The work was reprised in medical journals and quickly became the seminal piece on "toxic mold."
Robertson wasted no time in using the study as leverage against the Malibu defendants. As he tells it, "Once I provided them with the CDC report and other research, they realized they hadn't adequately prepared." Although home insurers don't cover personal injury, contractors and builders aren't immune. The Malibu defendants settled for $1.4 million: $940,000 for construction defects and emotional distress, and $460,000 in fees to Robertson.
The lawsuit was widely covered by the media, and before long Robertson was inundated with calls from homeowners. Mold litigation spread across the country. School districts in Illinois and Ohio were hit by suits from students claiming health problems. A Texas jury last June awarded $32.1 million to Melinda Ballard, a Dallas public relations executive: $6.2 million to replace her family's 22-room mold-infested home and possessions; $5 million for mental anguish; $12 million in punitive damages; and $8.9 million for legal fees. Fire Insurance Exchange, a subsidiary of Farmers Insurance Group, is appealing. (The gist of the suit is not personal injury but failing to act promptly on a water damage claim.)
While plaintiff lawyers were salivating over the numbers, the scientific underpinning of the litigation was crumbling. The CDC recanted its findings from the Cleveland infants' study. A new report, issued in early 2000, said that the earlier study was flawed for a number of reasons, including unorthodox collection techniques, and that there is no proof stachybotrys causes health conditions such as bleeding lungs or memory loss. It conceded that mold can cause allergic reactions like watery noses.
Robertson is not dismayed. "Mycologists aren't medical doctors," he retorts. "They don't understand mold's effect on the body." In any event, he can always argue that the second CDC report does not rule out a link between mold and illness; it only says there is no proven link.
Insurers are moving to protect themselves by capping liabilities for mold removal, especially in Texas, where there's a confluence of high humidity and wacky judges. Insurers estimate they paid out $670 million for mold-related property damage in Texas in 2001, more than double the total in 1999. Mold itself (unlike water damage) is not a covered event on a typical homeowner policy, but it can seep into water damage claims.
If the insurance industry escapes, the lawyers will find other deep pockets, just as they did for asbestos. In November a Sacramento, Calif. jury awarded $2.7 million to a family claiming mold in their apartment gave them headaches, constipation and asthma. The defendant was their landlord, who unsuccessfully argued the family's cats were responsible.
There are a lot of buildings in the U.S. and a lot of building owners who can be picked clean. Expect more litigation.
(Source: Forbes Magazine 01/21/2002)
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Jim Flynt
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Username: Jimflynt
Post Number: 358
Registered: 6-2001
| | Posted on Friday, June 21, 2002 - 11:22 am: | |
Calm the mold hysteria
Lawsuits breeding bigger problems for homeowners
By MIKE VALLANTE
A few years ago, mold growing in the shower was considered a harmless, if unattractive, fungus and a sure sign that it was time for a good cleaning and some bleach.
Today, an old reason to keep things clean and dry has spun out of control and morphed into mass hysteria of litigation and media hype that has yet to show any foundation in sound science.
Emboldened -- or is that "emmoldened" -- by a $32 million jury award to a family in Dripping Springs, personal-injury lawyers and would-be plaintiffs have developed a thriving new mold litigation business.
And lawyers in California haven't wasted any time in getting in on the mold action. Last year in Sacramento, a jury awarded $2.7 million in an alleged "toxic mold" case.
Since then, lawyers and their highly paid "experts" are convincing many people that they have become ill in the same way. Most recently, Ed McMahon of The Tonight Show and Publishers Clearinghouse fame has joined in claiming mold ruined his home and killed his dog. All the while lawyers continue trolling for clients for this lucrative new cause of action that has many experts calling mold "the next asbestos."
Overlooked so far in the frenzy is the fact that science has found no link between mold and any serious adverse health effects.
The judge in the Dripping Springs case refused to consider health-related claims because there is no scientific proof that mold caused the health problems being alleged.
The U.S. Centers for Disease Control and Prevention in Atlanta states on its Web site that a causal link between mold and "unique or rare health conditions ... " isn't proved. The CDC says common health concerns from molds do include hay-fever-like allergic symptoms.
But who needs proof when you've got inspectors in biohazard suits for photo ops? Personal injury lawyers and the media have combined to fan mold frenzy based on sensationalism rather than fact, and the hype is spurring an entirely new breed of problems for consumers.
Suffice it to say, that while the effects of mold are unclear, the effects of panic-induced lawsuits will become painfully clear as the costs of mold-related lawsuits and settlements will be passed on to homeowners across the nation in the form of increased insurance premiums, increased housing costs and higher rents.
Already, the threat of frivolous construction-defect lawsuits against builders and their projects scare some builders so much that they take their business out of state.
Even the most accessible form of housing -- condominiums and townhomes -- has all but disappeared as an option for working families due to ever increasing lawsuits filed against them.
So what can be done to put the mold frenzy back into proper perspective? A good first step would be to actually examine the science and conduct further study to determine what, if any, adverse health impacts can be directly attributed to mold.
A second step might be to determine what levels of mold are acceptable to the average person -- because, yes, mold has been around for millions of years and it is not likely to go away now.
If common-sense measures could be put into place to look at mold objectively, the public would be the better for it. California last year enacted a Toxic Mold Protection Act to study mold and determine permissible mold exposure limits. Other states with a toxic-mold lawsuit crisis should consider similar legislation.
Until the nation gets a good scientific handle on whether common household mold constitutes a real toxic threat the number of lawsuits will continue to skyrocket.
And businesses and individuals who find themselves on the receiving end of a mold lawsuit will find cold comfort in knowing that their fate will be determined not by fact, but by the latest sensationalist press story.
That being the case, it would be prudent to put all mold-related claims on hold until science can actually point to research and fact that proves mold causes harm.
Otherwise, lawyers with dubious claims will continue to maraud through our legal system, making millions off of questionable litigation that could end up costing Americans plenty.
(Source: Houston Chronicle, April 26, 2002)
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Jim Flynt
Registered User
Username: Jimflynt
Post Number: 357
Registered: 6-2001
| | Posted on Friday, June 21, 2002 - 11:17 am: | |
'Cooked' houses burn insurers
Frauds grow more mold before claims
By Laura Elder Caller-Times
May 5, 2002
They come to your house, convince you that you have a huge mold problem and urge you to leave immediately. While you're stuck in a rental property, they put wet towels in the house, spray down the draperies, hose down furniture - anything to increase moisture. They close the windows and crank up the heat.
It's called "cooking" the house, and it's a recipe for sprouting mold and bilking insurance companies out of thousands of dollars.
House-cooking, according to some in the industry, is the newest accelerant in the conflagration of mold claims in Nueces County. The rumors of the scams - done at times unbeknownst to homeowners and at times with their collusion - have spurred a statewide investigation, with a hard look into at least one company here.
"They do what they can do to infiltrate the house with mold," said Mark Hanna, a spokesman for the Texas Department of Insurance.
"What we have looked for are people who are in the restoration business who have concocted a plan with the homeowner to make their homes much worse than it may actually be as far as mold proliferation."
The losers in the scams are ratepayers, said Keith Androff a spokesman for State Farm Insurance in Dallas. Insurance companies say house-cooking could drive up insurance rates here.
Last fall, the Texas Department of Insurance asked the Texas Attorney General's office to look into possible price gouging practices in Nueces County in connection with mold removal services.
Nueces County fell under the department's scrutiny after insurance companies reported that the costs of mold claims here far exceeded the rest of the state. The department found that while Nueces County has only 1 percent of the state's homeowner policies, it had 8 percent of the largest mold-related claims - those worth $15,000 or more.
So far, no mold removal firms have been indicted. But the ramifications of the investigation have been felt locally.
Tom Kelley, a spokesman for the Attorney General's office, said the agency at one time had been investigating a Portland company, Mold Inc., a remediation company owned by Fred Rich. Kelley won't comment about that case, and said the attorney general is no longer involved in it.
In late March, special crimes investigators for the Department of Public Safety and U.S. Customs secured a warrant to search the office of Mold Inc. and a storage bin behind Rich's home.
Tom Vinger, a DPS spokesman, confirmed that an investigation was under way and that the agencies obtained a search warrant. The Caller-Times was unable to verify what court issued the warrant and the agencies declined to comment about the investigation. Vinger said a federal court might have issued the search warrant, but he could not confirm it.
'They're just fishing'
Rich said he has done nothing wrong and that he had never heard of house cooking. He said that officials had presented a warrant to him March 28 and that they had removed records from his business. Officials have not returned those records to him, he said.
"I think they're just fishing," he said. "They started contacting customers of mine three or four months before and questioning and threatening them and try to scare them into not doing their claim. They couldn't get anything there so they came and got my records."
Rich, who no longer operates Mold Inc., said he doubted that the investigation had anything to do with house-cooking. The investigation is most likely being pushed by insurance companies against anyone who tries to help homeowners, he said.
"An insurance company might offer $9,000 for something that costs $80,000 to clean up. You need proper equipment, proper machines set up, and it's very expensive."
Rich also said other local companies were being investigated. Kelley, with the Attorney General's office, would not confirm that.
Frequent fraud in area
Dick Poremba, a partner with engineering and environmental assessment company HNP Inc., said fraudulent mold actions against insurance companies occur frequently in Corpus Christi and The Rio Grande Valley.
HNP investigates mold and mold sources for insurance companies and other organizations. The 5-year-old company also provides clearance on mold remediation work, meaning that Poremba inspects the job after it's done. Poremba said he recently went to a house where a homeowner blamed his air conditioning unit for a mold problem.
Poremba said the unit wasn't the problem. During HNP's investigation, it found a 2.5-inch-tall toolbox that had been flooded, indicating that water deeper than that had poured into the home.
'People follow the money'
When HNP opened for business five years ago, it was the only firm investigating mold. Now the company has 40 local competitors. Not long ago, there were only two or three mold remediation companies. Now there are about 100.
"People follow the money," Poremba said.
While some companies are legitimate, the consumer should beware, Poremba said.
"There are a lot of good people who are doing this, there's a lot of people doing this who don't have experience and there are some that are just a scam," he said.
The Texas Department of Insurance first heard of house-cooking from insurers who said they had heard about it from homeowners and neighbors, Hanna said.
House-cooking scams can be orchestrated by any variation of players, said Alan Bligh, president of the Better Business Bureau in the Coastal Bend.
"It's fairly widespread, where an adjuster comes by to tell someone they have mold, and tell them they have to move out, and proceed to water down the house and grow mold," Bligh said. "The homeowner might be an innocent bystander."
Because house-cooking is a criminal offense and is typically perpetrated against insurance companies, the BBB does not log such complaints, Bligh said. Neither the Texas Department of Insurance nor the Attorney General's office could say how many suspected cases of house-cooking have occurred.
Who's in on the scam?
Bligh said he had heard that some mold remediation companies create mold, or in some cases make the problem worse, then offer to clean it up for thousands of dollars. Homeowners then pass the bill on to insurance companies.
In other cases, a public adjuster is in on the scam, he said. Public adjusters represent policyholders and receive a percentage of the payout, as opposed to insurance adjusters who work for the insurers.
The public adjuster might own rental property and steer the homeowner to that property after telling the homeowner that his or her home is mold-infested, Bligh said. A public adjuster can also be the same person who cleans up the mold.
Androff, the State Farm spokesman, said he hadn't heard of that particular form of fraud against insurance companies, but said Texans already pay the highest insurance rates in the nation and house-cooking couldn't help.
Last summer, Allstate, Farmers and State Farm - which together sell about two-thirds of all homeowner policies in Texas - said they would stop selling the most common state-mandated policy to new customers.
State Farm alone has agreed to sell a modified policy to new customers.
The decision by the big three didn't affect existing policies. But as policies come up for renewal, homeowners will have to go with a modified policy.
Some mold removal companies are urging customers to hurry "before time runs out" to make their mold claims.
While insurance coverage is scaled back, the costs are expanding. In March, Rod Bordelon, who leads the state Office of Public Insurance Counsel, encouraged homeowners hit with excessive rate increases to file complaints with the Texas Department of Insurance.
Again, insurance companies blamed the rate increases on an unexpected wave of mold claims.
Kelley with the Attorney General's office said the investigations were no reason to suspect that remediation companies are inherently dishonest.
"There are certainly companies that are on the up and up and we're looking at the industry broadly," he said.
(Source: Corpus Christi Caller Times 05/02/2002)
(Message edited by jimflynt on June 21, 2002) |
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