NAII: Conn. Regs Will Spark Mold Suits
NU Online News Service, Aug. 27, 1:35 p.m. EST?Connecticut's new insurer guidelines for mold damage coverage will spur lawsuits, an insurer association contends.
The National Association of Independent Insurers in Des Plaines, Ill., even as it issued that gloomy forecast, said it was "pleased" the state's insurance department had taken the lead and developed a uniform approach for insurers on the issue of mold and homeowners insurance.
The department earlier this month put out guidelines for form filings that propose to limit or exclude coverage for mold. It requires insurers to withdraw and re-file any forms, rates or rules that do not conform to the guidelines.
NAII Senior Counsel Gerald L. Zimmerman said the group applauded timely action by the department and appreciates that industry input was sought, but is disappointed the coverage limit amounts remained at $10,000 for first-party coverage and $50,000 for third-party coverage.
The third-party limit "is too high and will serve as a magnet for the plaintiff's trial bar," Mr. Zimmerman said.
NAII believes "lower amounts for each of the coverages would have been prudent," he added.
Mr. Zimmerman noted that the regulator's initial drafts of the limits in the guidelines were even higher. "Overall we are pleased with the guidelines and will continue to work with DOI on all issues related to mold," he said.
The NAII said its members write more than 24 percent of the Connecticut insurance market.
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