Abstract
Fungus (aka mould) is a fascinating organism, yet even more fascinating is the level of exploitation surrounding insurance claims and water-damaged properties. Not a day goes by without mounting frustrations from the industry regarding escalating costs and potentially unjustified responses to water damage claims and associated microbial contamination.
As a business that solely provides consulting on property damage resulting from water, fire, and mould (predominantly for the insurance industry), we see first-hand a volatile mix of responses, including ignorance, negligence and exploitation. A significant part of the problem in Australia is that anyone can call themselves a “mould expert.” We frequently see individuals who believe that because they hold a science degree or a PhD, they are automatically qualified to provide practical assessments of mould-affected buildings.
This lack of field-based expertise leads to confusion and unnecessary actions, impacting lives and significantly escalating repair costs. If it were not for the negative impacts on policyholders’ families and the massive increase in premiums, the situation would be almost laughable.
This article is a return to common sense in the industry and empowers stakeholders to question the expert advice that often feels highly questionable.
Contributing Factors to Escalated Water Damage Claims
While microbial growth is the focus, we must acknowledge the broader context. Changes to the design and construction of modern buildings have made them significantly more susceptible to water damage than in decades past.
- Less Resilient Materials
Hardwood is now seldom used in construction. It has been replaced by pine, plywood, MDF, Masonite, and particleboard. Hardwood is a resilient material; the likelihood of mould growth occurring before the material naturally dries is typically much lower than with engineered products. It is also less likely to warp, distort, or delaminate.
Conversely, modern materials like paper-faced plasterboard are quite literally pre-digested cellulose (the number one favourite food for mould. Given the right amount of moisture, significant microbial contamination can occur on these materials within days of becoming wet (a critical note for those involved in emergency make safes) or if exposed to high humidity (>70% RH) for prolonged periods.
- Energy Efficient Buildings
Modern buildings are designed to be “tight” with minimal air leakage. While this improves energy efficiency, it also traps liquid water and water vapour. In a 1960s home with a timber subfloor, an escape of liquid would often leak through gaps and naturally dry. In a modern airtight building, when moisture evaporates from wet materials, it often condenses on other surfaces, leading to secondary damage (mould growing where the initial water never touched). In these environments, response times for make safe and site stabilisation must be significantly faster than what was required twenty years ago.
- Air-Conditioning Systems and Humidity
Many air-conditioning systems (especially high-wall split units) installed over the last twenty years lack humidity control features. They are designed to cool a space, not necessarily condition it. Furthermore, oversized systems reach the desired temperature too quickly, meaning the compressor doesn’t run long enough to remove moisture from the air.
In humid regions, indoor and outdoor humidity levels can equalise depending on the building envelope. When mould growth occurs from prolonged high humidity without a specific liquid wetting event, it is referred to as environmental mould growth. This is often a result of poor design or occupant use and is typically not covered by insurance. The worst-case scenario occurs when modern units are retrofitted into older, uninsulated buildings in humid climates; the combination of internal cooling and warm, humid air entering the property is a certain recipe for mould growth.
- Plumbing Fittings and Initial Response
The failure rates of braided flexi-hoses have been well-documented and remain a leading cause of sudden, large-scale escapes of water. Regardless of the cause, the time it takes to attend the job is crucial. Delays in extraction, the removal of unsalvageable materials, and the commencement of the drying process inevitably lead to increased risk of microbial contamination.
The Current State of the Industry: A Blowout in Progress
The direction of water damage claims in recent years is absurd. We are seeing perfectly fine houses being demolished, insurance companies accepting mould claims where no defined event occurred, and restoration contractors being made to look incompetent (losing long-term contracts due to large-scale industry ignorance and a lack of backbone).
This current state stems from a lack of education regarding microbial contamination and the numerous limitations associated with common mould sampling methods. Only a small section of the industry is temporarily benefiting: specifically, consulting firms and laboratories. In 2015, only a handful of laboratories provided mould analysis in Australia. By 2021, there were over twenty.
The insurance property repair industry shares the blame by:
- Accepting misinformation from unqualified individuals.
- Allowing people without remediation experience to conduct “assessments.”
- Failing to challenge “clearance” reports that fail a job over incorrectly applied science or sheer ignorance.
The “Clearance” Scenario
We frequently see consultants sent to evaluate remediation weeks after a contractor has finished. These consultants may take swab samples for coliform bacteria from concrete slabs or mould samples from visibly clean structural elements. They then make determinations on whether the mould ecology is acceptable based on flawed logic and lab results provided with no context of the property. We now have building biologists, microbiologists, chemists, occupational hygienists and a raft of others who have never done a day of remediation in their lives, providing scopes of work and evaluating remediation projects. The truth is, most experienced restoration contractors are better qualified to judge a site than the trainee hygienists currently providing scopes of work.
Technical Focus: Understanding Mould Conditions
To bring integrity back to the process, we must adhere to the ANSI/IICRC S520 Standard for Professional Mold Remediation, which defines three conditions:
- Condition 1 (Normal Fungal Ecology): An indoor environment reflective of a normal fungal ecology, including settled spores or traces of growth.
- Condition 2 (Settled Spores): Primarily contaminated with settled spores dispersed from a Condition 3 area.
- Condition 3 (Actual Growth): Contaminated with the presence of active or dormant mould growth, visible or hidden.
The Asp/Pen-Like Spore Myth
A common error in reports is the claim that Aspergillus/Penicillium-like (Asp/Pen) spores are not commonly associated with outdoor environments, and therefore their presence indoors must indicate water damage. This is misleading.
On reviewing several hundred of our own projects, we identified Asp/Pen-like mould in approximately 80% of all outdoor samples. This genus is one of the most commonly identified moulds globally. We often find that taking a second outdoor reference sample from the other side of a property can completely normalise the indoor levels. The only way this genus should be considered indicative of a water-damaged building is if indoor levels are significantly higher than outdoors, and the lab identifies indicators such as chained spores, fruiting bodies, or hyphae.
Conclusion: What Can the Insurance Industry Do?
In Australia, research by Chubb reveals that the average claim from water damage increased by 72% between 2014 and 2018 (from A$17,627 to A$30,361). To stop the madness, the industry must:
- Demand Qualification: Only allow individuals with proven, practical experience in restoration to conduct assessments.
- Question Results: Stand up and arm yourself with sound information from recognised experts.
- Vetted Panels: Form panels for IEPs where staff are vetted and approved by leading industry veterans.
The industry needs a return to pragmatic, science-based consulting. It is time to move away from Mould Madness and toward Research Integrity and Compliance.