State Farm in hot water over homeowner’s insurance

Why was coverage denied for mold, upstairs leak?

Editor's note: Robert Bruss is temporarily away. The following column from Bruss' "Best of" collection first appeared Sunday, July 16, 2006. Magda Benavides purchased her ground-floor condominium in 1994. Seven years later, mold was found in the exterior walls adjacent to her unit. Benavides' physician advised her to move out. She submitted a claim to her condominium owner's insurance company, State Farm, which hired a civil engineer to investigate. State Farm later denied the claim because it was an excluded loss, which was not caused by an insured peril. The insurer pointed to its policy exclusion for mold. Purchase Bob Bruss reports online. Benavides also filed a claim based on water intrusion damage from an upstairs unit. Water leaked into Benavides' kitchen and living room during remodeling of the second-floor condo, which was promptly repaired by the neighbor. The insured condo owner brought this lawsuit against State Farm for alleged negligent investigation o...