"Add to this Florida's aggressive, opportunistic plaintiffs' trial bar and the potential for expensive class actions in the commercial liability arena, and the potential for catastrophe in the state's insurance market clearly exists," he added.

In his testimony, Mr. Stander noted that mold is generally not a cause for concern, and while some individuals may have allergic-like reactions to some molds in some situations, no official health standards exist regarding unacceptable levels. "As a result, the mold-related claims issue is particularly susceptible to junk science rather than hard, laboratory science," he said.

Mr. Stander noted that the combination of this scientific uncertainty and a litigious trial bar could "severely damage Florida's insurance markets."

Texas, he said, has experienced a major market disruption, with "many insurers either refusing to write new business or leaving the state altogether because of the massive number of costly mold claims." The result for Texas, he said, is the nation's highest homeowners insurance rates.

A contributor to the high claims frequency in Texas "was the state's use of a policy that provided the most expansive coverage for water damage in the nation," he said.

He added that Texas's insurance commissioner has recognized the problem and has taken steps to "allow differing policies, but restrictive coverage mandates clearly contributed to Texas's homeowners insurance problems."

Mr. Stander addressed the commercial liability area as well, "where mold-related problems largely arise as construction defect claims."

This, he said, compounds problems for insurers because most construction defect lawsuits involve multi-family units, such as condominiums, where the opportunity to enlist multiple plaintiffs fosters costly class action lawsuits.

He described one result in which nearly 5,000 California homeowners will recover about $8,000 each, while two law firms will split more than $10 million. "Florida, with its high density of multi-family dwellings, seems an especially lucrative target," Mr. Stander said.

He said the Alliance is urging the department to provide insurers with the maximum amount of flexibility in coverage offerings.

This, he said, will provide consumers with freedom to choose appropriate coverages and prices.