Insurance company sent no adjuster, no mold testing, and ignored contractor estimates for ceiling collapse in bedroom. Do I have a bad faith claim?

Question

During below-freezing temps the bedroom ceiling began leaking and then collapsed. The insurance co paid some but denied the remainder by labeling it seepage, despite our contractor being there that day and stating it was not seepage and occurred all at once. No adjuster would come to the property. I requested mold testing but they said no and denied mold coverage, telling me it's my responsibility. Seems improper investigation, bad faith, they label as seepage. I had a contractor there that day. He wrote it was not, but a sudden occurrence. What are my options?

Timothy Nolte · Answer

A physical loss (ceiling collapse) almost always requires an on-site inspection. What you describe fits a textbook “outcome-driven investigation”—i.e., the insurer selected an exclusion (“seepage”) first and then refused to investigate facts that would disprove it. That is precisely the conduct bad-faith statutes are designed to address. Labeling the loss as “seepage” without an inspection is indefensible. An insurer cannot reasonably determine gradual vs. sudden causation from a desk review alone. Mold testing is not always required as many policies contain exclusions for mold. However, it is possible to get compensated for mold damage, even if excluded from the policy, if the mold is caused by the delay or negligence of the insurer and not the insured. You can send a formal written demand letter to the insurer to force a re-investigation or you can retain an attorney who specializes in property damage and/or bad faith.

Insurance company sent no adjuster, no mold testing, and ignored contractor estimates for ceiling collapse in bedroom. Do I have a bad faith claim?

1 answer

Timothy Nolte

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