If your home was built before 1980, there’s a chance the materials used in its construction contain asbestos. Once lauded for its fire-resistance, asbestos was widely used for decades, but has since been linked to health threats, including mesothelioma, asbestosis and lung cancer.
If asbestos in the home is in good condition, it may not require any action, but if asbestos materials become damaged from old age or a renovation project, asbestos removal might be necessary to prevent exposure. Unfortunately, many home insurance policies don’t cover asbestos abatement, which can quickly become costly.
What is Asbestos and Why Should a Homeowner Care?
Asbestos was a common component in building materials for older houses and buildings for decades, often used in insulation, floor tiles and roofing materials. Identifying materials containing asbestos is difficult, as the minerals aren’t visible to the naked eye. Difficulty identifying asbestos coupled with its dangers mean it’s important for homeowners to work with licensed professionals to determine if there is asbestos present, where it’s located and if it should be encapsulated (sealed) or removed for safety. Ideally, potential homeowners can have an inspector analyze the home for asbestos before purchasing.
If a licensed asbestos contractor determines asbestos removal is needed, it’s important to check your homeowners insurance policy before beginning the process. Despite the known dangers of asbestos, many insurance companies don’t cover its abatement. Without the help of insurance, asbestos removal can be expensive, extending into thousands of dollars.
Asbestos generally isn’t covered by homeowners insurance because it has been deemed a toxic material or pollutant by laws and insurance companies, such as the Environmental Protection Agency’s (EPA) regulations around the toxin. If your policy contains a pollutant or contaminant exclusion, asbestos is likely included under this umbrella, even if it isn’t specifically named.
What to Look out for in Your Policy
Pollutant Exclusion
● Common in homeowners policies
● Asbestos is likely considered a pollutant
● Asbestos removal not likely covered
Contaminant Exclusion
● Common in homeowners policies
● Asbestos can be considered a contaminant
● Often worded ambiguously, and might require clarification
Asbestos Exclusion
● Not common in homeowners policies but occasionally included as an addendum
● Asbestos products and their removal won’t be covered by the insurance company
● Clearly worded
Be sure to look at your policy carefully and ask your insurance agent if asbestos abatement is covered. The purpose of these exclusions is to protect the insurance company from the cost of an environmental cleanup in the event that a hazardous material is released into the air.
When Asbestos Removal Will be Covered
Asbestos abatement may be covered by your homeowners insurance policy under its incident section, sometimes referred to as a “covered perils” section. The incident section covers events outside of the homeowner’s control.
Examples of Covered Perils That May Offer Asbestos Coverage
Windstorm Damage
If a windstorm damages your roof, asbestos materials that were previously dormant are released.
Water Damage
A pipe bursts and damages insulation materials, causing dormant asbestos to become active.
Fire Damage
While asbestos is fire resistant, the materials containing it may not be. If a fire causes the release of asbestos fibers, removal may be covered.
Ice or Snow Damage
If your roof collapses due to the weight of snow and the insulation contains asbestos which has now released fibers, removal may be covered.
If a qualified unforseen event occurs and you are unsure if asbestos may have been released, you should contact a licensed asbestos professional to come and test the location. Should the tests show asbestos presence as a result of the incident, your policy may cover some of the cost of the asbestos removal. Until the results come back, you should take precautions to avoid asbestos exposure in the aftermath.
Insurance Limitations
Asbestos removal may be partially covered through your policy under these circumstances, but again, it is dependent on the policy type and potential exclusions. It is also important to note that your policy may have a limit on how much they will pay towards certain elements of a claim. If you are filing a claim under the incident policy and need asbestos removed as well, you should talk to your insurance agent to find out how much of the asbestos abatement will be covered.
Understanding Coverage
If you own an older home, considering asbestos coverage is important when researching and purchasing homeowners insurance. As you consider a policy, you can request an addition to cover asbestos, in case your home needs encapsulation or removal in the future. In some cases, the company will grant the request for an additional fee, but others may reject the additional coverage request. In addition to finding the right coverage, enlist the help of professionals when inspecting your home, conducting repairs, or renovating and addressing any damaged areas, such as crumbling drywall, fallen insulation, chipped tiles and other materials that are likely to contain asbestos.
When Asbestos Removal Will Not be Covered
If you suspect the presence of asbestos in your home, look into the details of your coverage, and keep the previously mentioned exclusions in mind. There are several notable circumstances where removal is not covered that homeowners should be aware of.
Notable Circumstances That Probably Are Not Covered
● Damage to your home from neglect, causing asbestos disturbance
● Disturbance from a home renovation with or without professional help
● Negligence, such as a pipe knowingly left leaking into insulation, causing the release of asbestos fibers
● Flood damage typically isn’t included in insurance policies unless it is specifically added, so asbestos removal also will not be covered if you don’t have flood insurance.
When looking at damage from homeowner’s neglect, the definition of negligence varies; it can refer to situations where a homeowner has allowed a space to be in disrepair, which has led to asbestos being released. In other cases, it can refer to homeowners damaging materials and releasing asbestos fibers themselves. If homeowners were aware of the potential for asbestos disturbance during reckless actions to their home, asbestos abatement is challenged even further, and it’s likely that the homeowner will have to cover all related costs.
Solutions
To find out if your homeowners insurance policy covers asbestos removal, you should talk to your home insurance agent and review your policy. Be on the lookout for sections discussing pollutants and contaminants, and if your policy has one call your agent to see if asbestos is included under those terms.
If your policy does not cover asbestos removal, but you need funds to cover it, a good place to look is your state environmental agencies for funds and grants to help you with the cost of removal.
While asbestos removal is expensive and rarely covered by your homeowners insurance, it is important that you never attempt to handle or remove the material by yourself. Doing so could damage the material and lead to asbestos exposure and health complications. You should always have a licensed asbestos contractor handle removing or repairing asbestos found in your home.
June 28, 2018
Source: Mesothelioma + Asbestos Awareness Center
Retrieved from: www.maacenter.org
FINRA Compliance Reviewed by Red Oak: 540764