Hurricane Deductible, Mold Sublimit, and the Old Window Seal
A named hurricane strikes coastal Alabama. A dwelling policy covers a $400,000 home with a 2% hurricane deductible and a $2,000 all-other-perils deductible. Wind-driven rain enters through a window seal that failed during the storm, damaging drywall, hardwood floors, and furniture. Three weeks later, the insured reports mold in the same rooms. The contractor estimates $60,000 for building repairs, $15,000 for contents, and $12,000 for mold remediation. The policy excludes mold but grants a $10,000 sublimit for mold resulting from a covered water loss. The adjuster’s inspection confirms the window seal failed, but the seal was 18 years old and already cracked before the storm. The insured did not tarp or dry the rooms for nine days because she was out of town.
1. Which deductible applies, and why?
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The 2% hurricane deductible likely applies: $8,000. The loss began during a named hurricane, and the entry point was wind-driven rain after the window seal failed. The efficient proximate cause is the hurricane wind, not the age of the seal alone. The hurricane deductible applies to the entire loss caused by the named storm, not just the wind-opening repair. The $2,000 all-other-perils deductible would apply only if the adjuster concludes a separate, non-hurricane cause initiated the damage. Because the seal was already cracked, the insured may argue the loss is ordinary water damage; the adjuster should document the storm timeline, the seal condition, and any anti-concurrent-causation language. If the policy has an anti-concurrent-causation clause, the hurricane deductible and storm-related exclusions may control even if the old seal contributed.
2. How much can be paid for building, contents, and mold? Show the calculation.
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Start with the covered loss: $60,000 building + $15,000 contents + $12,000 mold = $87,000. Apply the $8,000 hurricane deductible once to the total loss: $79,000. Then apply the $10,000 mold sublimit, reducing the $12,000 mold charge by $2,000: $77,000 payable, before any other deductions. The nine-day delay does not automatically bar the initial water damage, but it may support a failure-to-mitigate reduction for the mold that developed or worsened after the insured could have arranged drying. The adjuster should separate pre-delay water damage from post-delay mold, document the timeline, and pay the undisputed portion. Contents coverage depends on the policy's contents limit and any special limits; the facts do not show a contents sublimit, so no reduction is assumed.