Until a jury returned a $32 million verdict against the Fire Insurance Exchange in Ballard v. Fire Insurance Exchange, No. 99-05232 (Texas District Court, Travis County, June 1, 2001) mold claims were simply denied based upon the exclusion in the basic Homeowners' policy and the denials were accepted by the insureds.
The verdict in the Ballard case caused a severe and pervasive fear of mold claims in the insurance industry. The fear resulted in various changes to policies with either thorough and detailed exclusions for mold or an agreement to coverage with a very small limit of liability.
The fear was mostly misplaced.
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