Managing Claims that Involve Mould: Our Complete Guide

Managing Claims that Involve Mould – Our Complete Guide  

There is no such thing as a mould claim. Most home insurance policies do not cover mould on its own. It only becomes part of a claim when it develops because of an insured event like a storm, flood or burst pipe. The problem is that many mould cases begin with water damage that was not handled properly. If wet materials are left in place, if drying is delayed, or if hidden areas are missed, water ingress can lead to mould growth. Once mould takes hold, it can spread quickly and turn a manageable water claim into a major contamination issue. 

This matters because mould can cause serious health concerns, damage your belongings, and make your home unsafe to live in. Insurers may try to deny responsibility or argue that the mould is environmental, leaving you to deal with the consequences. 

This guide explains how mould-related claims work, what should happen after water damage, the early warning signs that your insurer is not responding correctly, and the practical steps you can take to protect your home, your health and your rights under the policy. 

How Claims That Involve Mould Start 

Any water ingress has the potential to turn into a mould problem. This includes storms, floods, roof leaks, burst pipes and even minor water damage. Scientific evidence shows that mould can begin to grow within 24 to 48 hours if moisture is not removed and materials are not properly dried. 

Unfortunately, many mould issues come from delays rather than the event itself. A customer reports water damage. The insurer sends someone to check the cause instead of drying the property. No drying equipment (such as dehumidifiers) are installed. Wet materials are not removed. The insurer debates liability. Days turn into weeks. Soon, the home has visible mould, and airborne contamination or odour, and which can sometimes  have serious health impacts. This can be delayed significantly if the event affected multiple properties, such as during a major storm, flooding or cyclone, when insurer resources are stretched and assessments are backlogged. These delays can result in further damage to your home, contamination of your contents and serious health risks, especially for vulnerable people with respiratory conditions, young children, the elderly, or anyone with existing health concerns. 

How Your Policy Responds  

Most domestic home insurance policies in Australia are event-based policies. This means damage is only covered when it is caused by a single insured event as defined in the policy. Common insured events include storm, flood, cyclone, fire or a sudden accidental escape of liquid. If there is no insured event, the policy generally does not respond, even if the damage is serious. 

Mould sits squarely within this framework. Mould itself is not an insured event. It is almost always excluded unless it is a direct result of water that entered the property during a covered event. In other words, the insured event is the water ingress, and the mould that develops afterwards is the resulting damage. 

This distinction is critical to understanding claims that involve mould. If mould develops due to general dampness, humidity, ventilation problems or long-term leaks, insurers classify it as maintenance and exclude it. However, if a storm, cyclone, flood or burst pipe allows water to enter the home, and mould grows because that moisture was not removed quickly or correctly, the mould is considered part of the insured loss. 

Many disputes arise because insurers attempt to break the link between the insured event and the mould. Homeowners are often told the mould is pre-existing, environmental or caused by humidity. But if the event allowed water to enter, the insurer must prove that the mould did not result from that water ingress. The burden of proof sits with the insurer when they rely on an exclusion to decline the claim or reduce their liability for the claim.  

Evidence becomes crucial. Photos and videos taken during and immediately after the event help show what areas were impacted. Moisture readings and scientific mould testing provide objective data on how the mould developed. If the insurer’s contractors dismiss the mould without testing or make statements like environmental mould or humidity mould, this is an opinion rather than proof. Proper testing is needed to identify whether the mould indoors differs from the mould outdoors, which is a strong indicator of a water related cause. 

It is also important to understand that the policy covers the entire property. Ceiling cavities, wall cavities, insulation and subfloor areas are all part of the insured property. If event related water reached these spaces, the resulting mould must be assessed and remediated by a qualified remediation expert. Statements that mould in a ceiling void does not need treatment because it is not habitable are incorrect. The policy applies to the whole structure. 

Once the insured event is established, the focus turns to linking the resulting mould to that event. If the water came in during the event and mould followed, the general starting position under Australian policies is that the mould should be treated as part of the insured damage. 

Understanding Water Classification and Why “Clean” Water Often Isn’t 

Many homeowners believe that rainwater or water from a roof leak is clean, but under the IICRC S500 standard it almost never is. Once rainwater hits a roof, it picks up dirt, debris, bird droppings and organic matter. As it travels through insulation, timbers and ceiling cavities, it can collect even more contaminants, including rodent faeces and microbial residue. By the time it enters your home, it is rarely safe and often requires contaminated materials to be removed, not simply dried or painted. Water classification matters because it determines the level of remediation required and directly impacts mould risk. Here is how the IICRC S500 categorises water: 

• Category 1 Water – Originates from a clean source such as a burst tap line. Even then, it can quickly degrade into higher categories once it touches building materials or becomes stagnant. 

• Category 2 Water – Contains significant contamination. This includes water from roof leaks, storms, overflowing gutters or any water that contacts insulation, plasterboard or structural timbers. This is because it often picks up contaminants in the roof void for example rodent faeces. It poses a risk of illness if left untreated and requires removal of affected materials. 

• Category 3 Water – Heavily contaminated and hazardous. This includes floodwater, sewage or any water that has been in contact with organic waste, soil or long-term saturated building materials. It requires strict containment, removal of all porous materials and specialised remediation. 

Understanding these categories helps you challenge incorrect assumptions in reports. If someone claims the water was clean or safe to leave in place, the classification rules show why that is rarely true and why proper remediation is essential to stop mould from developing. 

What Should Happen After Water Damage 

Whether the water enters your home because of a storm, cyclone, flood, burst pipe or roof leak, the steps you take should be the same. The goal is to stop further damage, remove moisture quickly and create a clear record of what happened. Acting early is the difference between a simple water claim and a major mould contamination problem. 

1. Stop more water entering the home. 

2. Identify all wet areas, including walls, ceilings, flooring and cavities. 

3. Notify your insurer immediately and lodge a claim. 

4. Request that the insurer assess your entire property for water ingress, not just the areas you can see. 

5. Ask for an urgent makesafe. This includes removing wet or contaminated materials such as plasterboard, insulation or carpet underlay.  It also includes taking steps to prevent further water damage, such as installing a tarp or securing the roof, placing sandbags where appropriate, and addressing any immediate safety hazards. 
6. Request that your insurer install professional drying equipment until moisture readings confirm the structure is dry. 
7. Contain affected rooms to stop mould from spreading, especially if water entered wall or ceiling cavities. 
8. Document everything with photos, videos and written notes. Record every conversation and promise made. 
9. If you suspect mould, notify your insurer in writing immediately. 
10. Look out for red flags from the insurer or their contractors. These include dismissive comments like “oh no, it’s fine,” “we don’t need to check that,” or “you can just paint over it.” If a contractor refuses to test for mould, avoids checking ceiling or wall cavities (especially if water has entered through the roof), or downplays visible damage without proper inspection, treat it as a warning sign. These early decisions often shape the rest of your claim and can result in serious long-term damage if not challenged.
11. Obtain independent evidence, including your own scientific testing or a specialist inspection. 
12. If the claim is delayed or disputed, escalate to AFCA or seek professional assistance. 
    
    

Insurers are required to carry out makesafes. This applies to both external damages, such as tarping the roof, and internal damage, such as drying and removing wet materials. Ask for both makesafes clearly and in writing. Early action prevents mould, protects your home and creates a stronger claim if disputes arise. 

Why Claims That Involve Mould Become So Complex 

Claims that involve mould are far more complex than other types of claims for several reasons. 

• Mould spreads. Water in a wall cavity today can become mould throughout a home months later. 

• Industry standards differ. Unlike building codes, restoration and mould standards leave room for interpretation. 

• Providers vary in skill. Some restorers and hygienists have strong training, others do not. 

• Some experts make assumptions. Many reports incorrectly label mould as environmental, or humidity based without testing. 

• Insurers often delay. If a claim is being assessed or disputed, drying and removal may not occur. Delays allow mould to grow, and the damage becomes severe and costly. 

• Health effects escalate. Families may develop rashes, respiratory issues, behavioural changes or other serious symptoms. 

These problems quickly create disputes between insurers and homeowners, especially when mould has developed because the insurer did not act early. 

What is a makesafe and why is it important?  

A makesafe is the immediate work carried out after water damage to stop further deterioration of your home. It is one of the most important steps in any storm, flood or water ingress claim. A makesafe is not the final repair. It is the urgent work needed to stabilise the property, remove moisture and prevent mould growth. This reduces the risk of further damage. 

Most home insurance policies cover the cost of a makesafe when the damage is caused by an insured event. This includes storms, floods, cyclones, burst pipes and other defined events. Because a makesafe prevents further damage, insurers are required to arrange it promptly once you have notified them of the loss. 

A proper makesafe usually includes two parts. External makesafe work stops additional water from entering the home, such as tarping a damaged roof, sealing broken tiles or covering openings caused by flying debris. Internal makesafe work focuses on removing wet materials and starting the drying process. This can involve cutting out saturated plasterboard, removing soaked insulation, lifting wet flooringand installing dehumidifiers and air movers. 

The purpose of a makesafe is straightforward. Water left inside a home for even a short period can cause structural damage, contamination, widespread mould and significant increases in repair costs. A makesafe limits this damage and protects both you and your insurer from expensive and avoidable problems. 

Insurers must carry out makesafe works when an insured event occurs. If the insurer delays or refuses to complete a makesafe, the risk of mould increases, and you may be left dealing with damage that should have been prevented. For this reason, always request a makesafe in writing and specifically ask for both forms of makesafe (internal and external). One should address the roof or entry point of the water, and the other should address internal drying and removal of wet materials. 

Practical examples of a makesafe:  

• Storm damaged roof – A cyclone lifts tiles on your roof and water pours into the ceiling. A proper makesafe would include tarping or sealing the roof immediately, removing wet insulation, cutting out saturated plasterboard in the ceiling and installing dehumidifiers to dry the cavity. 

• Burst pipe in the kitchen – A pipe under the sink bursts while you are out. Water spreads through the cabinetry and into the wall. A makesafe may involve isolating the water supply, removing wet kickboards, cutting out soaked plasterboard, extracting standing water and installing drying equipment to prevent mould. 

• Leaking skylight during heavy rain – Water runs down the inside of the skylight shaft and drips into the living room. The makesafe should include sealing the skylight, removing damaged plaster, checking roof cavity moisture with thermal imaging, and drying the affected area. 

These practical examples show that a makesafe is more than a simple patch job. It is a coordinated response designed to limit further damage and prevent a small claim from becoming a major mould remediation project. 

Early Warning Signs of a Mould Problem 

If you have had water damage, look for these signs: 

• The insurer has not removed the materials damaged by water.  

• Odour when entering the home. 

• Stains or discolouration on walls or ceilings. 

• Damp areas that never completely dry. 

• Persistent sinus, rashes, issues/infections or respiratory symptoms. 

• Visible mould on walls, ceilings or furniture. 

If any of these appear, act immediately. Buy a moisture meter, take photos and contact your insurer in writing. 

Red Flags to Look Out For  

When you have water damage in your home, small warning signs can indicate that the insurer or their contractors are not responding properly. Acting early can stop a minor issue from turning into a major mould remediation claim. The following red flags are some of the most common indicators that something is going wrong. 

• Wet materials are left in place – If plasterboard, insulation, carpet or timber remains wet for more than a short period, mould can begin to grow. If restorers or builders tell you materials can simply be painted or left to dry naturally, that is a major warning sign. 

• The insurer only inspects the visible damage – If the insurer or their provider looks only at the room where water is dripping and refuses to check the ceiling cavity, adjacent rooms or other areas that may also be affected, you should raise this in writing immediately. Water often spreads further than the visible stain. 

• No makesafe is offered – If you report active water ingress and the insurer does not arrange a roof tarp or internal drying; you should request a makesafe in writing. A refusal or delay in arranging one increases the risk of mould. This often happens when the insurer claims the issue is due to a maintenance defect or pre-existing condition and says it is the homeowner’s responsibility to fix. Even in those cases, the insurer is still required to carry out a makesafe to prevent further damage. While they may not be required to permanently repair the cause, they must take reasonable steps to stabilise the home and stop the situation from getting worse. 

• The insurer sends only a builder, not a restorer – Builders are not necessarily trained to handle water contamination or mould prevention. For significant water ingress, a qualified restoration company should attend with proper drying equipment and experience. If only a builder is sent, request a restorer. Far too often, we see builders advising that water stains can be painted over when the restoration standards clearly require the damaged materials to be removed. 

• The provider makes assumptions about mould without testing or calls it ‘Environmental’ – If a builder, restorer or hygienist starts using phrases like “environmental mould”, “humidity mould” or “not event related” without taking scientific samples, which is a major warning sign. It is important to know that no one can reliably determine the cause of mould by simply looking at it or smelling it. Any claim that it is environmental mould is an assumption and not supported by evidence. Scientific testing is the only way to understand what type of mould is present and whether it is consistent with water from an insured event such as a storm or leak. If a provider makes these claims without taking samples or comparing indoor mould to the outdoor reference sample, you should raise your concerns in writing and request independent testing. 

• Insurers or their providers state that non-habitable spaces don’t need remediation – A recurring misconception in that that involve mould is the belief that insurers or providers only need to remediate visible or habitable areas of the home. This is incorrect. Your insurance policy covers the entire property, not just the spaces you live in day to day. Roof cavities, wall cavities, subfloors and other non-habitable spaces are still part of the insured property. If water enters these areas during a storm or leak and mould develops, the insurer is responsible for addressing that damage as long as it is linked to an insured event. Ensure that your insurer gets a post remediation verification (PRV) from an independent party to confirm mould have been appropriately remediated prior to commencing repairs. 

This is particularly important in claims that involve mould because these unseen areas often hold the highest levels of moisture. Insulation can remain soaked, timbers can stay damp, and plasterboard can absorb contaminated water. Even if you cannot see the mould from inside your home, it can still be spreading within cavities. 

AFCA outcomes have reinforced that insurers must consider the whole property, including non-habitable spaces, when assessing storm and water damage. If a provider tells you that the roof cavity or wall cavity does not need to be inspected or remediated because you do not live in it, treat that as a red flag. Hidden mould in these spaces can continue to spread and can significantly increase the scope and cost of repairs later. 

Consumers should insist that insurers assess the full extent of water ingress, not just the visible stains or the one room where water appeared. This includes requesting roof cavity inspections, moisture mapping and scientific testing where appropriate. 

• The insurer refuses to check the ceiling cavity – The ceiling cavity is part of your home and is covered under most policies. If a provider refuses to access or test this area, ask for a different provider or request escalation to the dispute resolution team. It is also often the best place to determine where the water is entering the property. It is also often the most reliable way to determine the source of water entry and support a clear link between the damage and the insured event.  

• Reports do not match what the provider said onsite – If a restorer or inspector told you one thing in person but the written report says the opposite, ask for clarification in writing and raise the inconsistency with your insurer. This is a common sign that the report may favour the insurer. 

• You feel pressured to accept an assessment or decision – If the insurer or provider tells you that a decision is final, discourages you from seeking independent testing or pushes you to agree to repairs you are uncomfortable with, consider lodging a complaint immediately. 

• Providers with no public reviews, or providers owned by loss adjusters – Another red flag is when the insurer appoints a provider who has no public reviews, no visible trading history or is linked to a loss adjusting firm. In claims that involve mould, this matters more than people realise. Early decisions by builders, restorers or so-called hygienists often determine whether a claim remains small and manageable or becomes a major mould contamination issue. If a provider fails to remove contaminated materials, fails to dry the property or fails to carry out testing, the mould can spread. Once this happens, insurers may try to recover their increased remediation costs from those same providers. 

This is why consumers must be alert. If a provider could be held responsible for their earlier failures, they may have an incentive to minimise the extent of mould or justify their initial actions. That can include dismissing concerns, avoiding testing or making assumptions that favour the insurer. 

It is also concerning when a provider has no reviews or is owned by another entity involved in the claim such as a loss adjuster. In some cases, a firm marketed as an independent engineering or hygiene company is actually the same ABN holder as the loss adjusting company. That creates an obvious conflict. Consumers should always research who is being sent to their home and question any connection that undermines independence. 

If you cannot find reviews, cannot confirm their qualifications or discover they are linked to the loss adjuster managing your claim, raise this with the insurer in writing and request a genuinely independent provider. 

Recognising these red flags early and acting on them can significantly improve your chances of resolving the claim quickly and preventing long term damage to your home. 

Practical Tips to Overcome Red Flags 

When a mould related claim starts to go wrong, the best approach is to take clear, practical steps that protect your rights and create a solid evidence base. Rather than arguing with providers or relying on verbal assurances, focus on actions that put you back in control of the process. 

• Request everything in writing – If someone tells you something on site, follow up with an email confirming what they said. Written records stop misunderstandings and prevent reports from contradicting what you were told. 

• Document the property thoroughly – Take photos and videos of all wet areas, water pathways, ceiling cavities if accessible (and safe to do so), affected rooms and any mould development. Continue documenting the progression over time, especially if the insurer delays action. 

• Request scientific testing early – If there is any suggestion of mould, ask for independent scientific testing including air samples and surface swabs. Testing removes guesswork and prevents unsupported assumptions about “environmental mould”. 

• Request both types of makesafe – Ask explicitly for a roof makesafe to stop further ingress and an internal drying makesafe to remove wet materials and install drying equipment. This limits mould growth and helps prove the insurer failed to act if things worsen. 

• Research and question provider independence 
  Look up the builders, restorers or hygienists being sent to your home. If they have no public reviews or are linked to a loss adjuster, raise this with the insurer and request a genuinely independent provider. 

• Seek independent expert evidence where possible – If you can, obtain an independent mould or moisture assessment. This can counter incorrect assumptions and is often the most influential evidence in a dispute. 

• Critically Review Reports – When you receive a report, read it critically and look for anything that may unfairly favour the insurer or simply doesn’t pass a sense check. Call out any assumptions presented as facts, such as claims that mould is environmental or preexisting without scientific testing or evidence to support it. Identify comments made outside the author’s area of expertise, for example builders commenting on mould causation or hygienists commenting on roof defects. Note any conflicts of interest, including when the provider is linked to a loss adjuster or previously attended the property and may be defending their own earlier mistakes. Correct any factual inaccuracies by referring to your photos, videos and written timeline, and raise these issues in writing with the insurer. A single unsupported assumption or incorrect fact can shape an entire claim, so addressing these issues early is essential. 

• Make a complaint – If you notice repeated delays, refusal to test or missing steps, lodge a formal complaint under RG271. If the insurer maintains its position, progress to AFCA without waiting for the problem to worsen. 

What are the IICRC Mould Standards  

The two key industry standards for water damage and mould remediation are the IICRC S500 (for professional water damage restoration) and the IICRC S520 (for professional mould remediation). These standards are not legislation, but they set the minimum professional expectations for how restorers should identify, assess, dry and remediate a property safely. Both standards recognise that microbial growth can begin within 24 to 48 hours after water enters a home, which is why immediate action is essential. They require full moisture mapping, removal of contaminated materials such as wet plasterboard and insulation, appropriate containment, use of professional drying equipment and, where necessary, scientific testing to understand the extent of mould contamination. They also classify water types, with water from storms, roof leaks and saturated building materials often falling into categories that require more than cosmetic repairs. If a provider relies on a visual inspection alone, ignores moisture in concealed spaces or provides opinions that do not align with the IICRC S500 or S520, their conclusions are less reliable. Referring to these standards can help you highlight when a claim was not managed in line with accepted industry practice. 

IICRC Mould Classifications: Condition 1, Condition 2 and Condition 3 

The IICRC S520 standard categorises indoor mould contamination into three conditions. These classifications help determine how severe the mould problem is, how far it has spread and what level of remediation is required. Understanding these conditions can help you challenge inaccurate assessments and ensure the insurer remediates the property to an acceptable standard. 

• Condition 1 – Normal Fungal Ecology – Condition 1 refers to areas where the mould levels indoors are consistent with what would normally be found outdoors. In a Condition 1 environment, there is no active mould growth and no amplification caused by moisture. Lab results typically show mould species and count similar to the outdoor sample. A room or area in Condition 1 does not need remediation, but it should still be monitored if water ingress has occurred nearby. 

• Condition 2 – Settled Spores / Contaminated Areas Without Visible Growth – Condition 2 describes areas where mould spores have spread into adjacent rooms or cavities even though there is no visible mould growth. These spores often travel through the air from an affected room or through interconnected spaces like wall cavities or the ceiling void. Testing may show elevated airborne mould counts or mould species indoors that differ from the outdoor sample. Condition 2 areas require cleaning, HEPA vacuuming, air filtration and sometimes limited removal of materials, depending on the extent of contamination. 

• Condition 3 – Active Growth and Heavy Contamination – Condition 3 applies to areas with visible mould growth or heavy amplification of spores. This includes saturated materials, long term moisture exposure, contaminated insulation and mould within wall or ceiling cavities. Species such as Stachybotrys or Chaetomium are often found in Condition 3 environments. These areas require full remediation, including removal of affected porous materials, containment, negative air pressure, HEPA filtration, detailed cleaning and post remediation verification to confirm the home is safe. 

These classifications matter because they determine the level of cleaning, removal and testing required to return your home to a safe condition. If an insurer or provider dismisses contamination or suggests cosmetic fixes, the IICRC conditions help demonstrate the level of risk and the professional steps needed to address it properly. 

Why Documentation Is Your Best Protection 

One photo or video taken at the right moment can be the difference between a successful insurance claim and a declined one, which is why thorough documentation is your strongest protection in any mould related claim. Record everything as soon as the event occurs, including photos and videos of where the water entered, how far it travelled, what areas were wet and what parts of the home were unaffected. 

Keep written notes of every conversation with the insurer and follow up phone calls with short confirmation emails. Ask for copies of all builders, restorer and hygienist reports and save them in a single folder along with photos of any drying equipment used or, importantly, not used. If mould begins to appear, take regular photos to show its progression. Everyday videos, such as family moments, can also prove what your home looked like before the event and are often powerful evidence when an insurer claims mould was pre-existing. The more you document in real time, the easier it becomes to link the mould to the insured event and challenge any incorrect assumptions later.  

If you notice new or worsening damage, especially mould appearing in areas that were not previously affected, notify the insurer in writing as soon as possible. This creates a written timeline that shows the insurer was made aware of the issue and had an opportunity to respond. Keeping this type of record is important if the damage continues to spread and you need to dispute the insurer’s handling of the claim. It can also be used as evidence if the matter is later escalated through the complaint process or taken to AFCA. 

What Is an Indoor Environmental Professional (IEP)? 

An IEP, or Indoor Environmental Professional, is a specialist who assesses indoor environments for contamination, moisture and mould. Unlike builders or general restorers, an IEP focuses on understanding how water has moved through a property, what materials have been affected, whether mould is present and what level of remediation is required. Their role often includes moisture mapping, air and surface sampling, assessing hidden cavities and interpreting laboratory results. However, it is important for homeowners to understand that the title IEP does not guarantee a high level of qualification. Some IEPs have extensive experience and scientific training, while others have only completed short courses. An IEP is not necessarily an occupational hygienist and may not have a university level background in occupational hygiene or health. Because of this variation, you should always ask for the person’s qualifications, request scientific testing rather than visual assessments and check whether they are independent from the insurer or the loss adjuster. A skilled and genuinely independent IEP can be critical in proving that mould is linked to an insured event, but a poorly trained or conflicted IEP can make incorrect assumptions that harm your claim. 

If an IEP, builder, restorer or hygienist only works for insurers, you need to be aware of the incentives that may influence their assessment. Providers who rely entirely on insurer panel work have strong commercial reasons to keep insurers happy, minimise claim costs and avoid findings that reflect poorly on earlier decisions or missed steps. This does not mean every provider is biased, but it does mean their reports may lean towards conclusions that favour the insurer, such as suggesting mould is environmental, downplaying contamination or overlooking moisture in concealed areas. When a provider’s entire workload comes from one source, there is an inherent pressure not to produce findings that increase the insurer’s liability. For this reason, always ask about their independence, request scientific testing and critically review any assumptions or statements that are not supported by data. It is important to review the report to ensure they are not commenting on matters outside their area of expertise, including commenting on whether the property is safe for occupation without the appropriate training or qualifications. 

What to Ask for When Requesting an Independent Assessment 

If you are asking your insurer to arrange an independent assessment, it is important to be specific about what you want. A general request such as please send someone independent often results in the insurer appointing another provider from the same panel, or even the same company that made the initial errors. To protect yourself, you should clearly outline the requirements for a genuinely independent and thorough assessment. When requesting an independent assessment, ask for: 

• A provider who is not connected to the original builder, restorer, loss adjuster or hygiene company – Ask the insurer to confirm in writing that the assessor has no commercial or contractual links to any provider previously involved in the claim. 

• Full moisture mapping of the entire property – This should cover all affected and adjacent areas, including walls, ceilings, flooring, and concealed spaces. Moisture meters and thermal imaging should be used, with readings documented. 

• Testing of wall cavities if water may have entered them – Wall cavities often hold hidden moisture long after the visible areas appear dry. Request that the independent assessor conduct moisture readings, air sampling or cavity inspections where there is any possibility that water travelled behind walls. 

• Inspection of the ceiling cavity if the roof was impacted – If water entered through the roof or ceiling, insist that the assessor physically enters the roof space to determine how the water travelled, what materials were affected and whether mould or moisture remains. Request sampling in the roof cavity if any staining, dampness or insulation saturation is identified. 

• Scientific mould testing, not visual assessments – Ask specifically for surface swabs and air samples analysed by an independent laboratory. Request copies of the raw lab data, not just the summary. 

• A clear statement of the assessor’s qualifications and experience – Ask whether they are an occupational hygienist, an indoor environmental professional, a building scientist or another discipline. This ensures they are working within the limits of their expertise. 

• A written report with methodology, photos and moisture readings – The assessment should clearly explain how the conclusions were reached and include photo evidence of all tested areas. 

• Comparison of indoor and outdoor mould samples – This is essential for determining whether the mould indoors is consistent with water related ingress rather than humidity or environmental exposure.  

• Clear recommendations based on the IICRC S500 and S520 standards – Ask that the assessor outline what remediation is required under the recognised industry standards, not based on subjective opinion or cosmetic fixes. 

• Direct access to all findings – Request that all reports, lab results, moisture readings and photos be provided to you at the same time they are supplied to the insurer. 

A detailed and specific request makes it much harder for the insurer to appoint a provider who simply repeats earlier conclusions. It also increases the chances of obtaining a thorough and genuinely independent assessment that can help resolve disputes and establish the true extent of water damage linked to the insured event. As part of your request, you should also ask what information has been provided to the expert before their attendance. For example, ask whether they were given previous reports that might influence their opinion, or whether they received instructions from the insurer that could frame the assessment to support a decline. Understanding what the expert was told can help identify potential bias or conflicts and ensure the assessment is based on a fresh and objective review of the property. 

Common Types of Mould and What They Mean 

When scientific testing is carried out, the lab report will usually identify the genera of mould found indoors and compare it to the outdoor reference sample. Different mould types can indicate different sources of moisture and different levels of contamination. Below are some of the most common moulds found in Australian homes and what they generally mean in the context of an insurance claim. 

• Cladosporium – One of the most common indoor and outdoor moulds. It often appears in early stages of moisture exposure. If levels indoors are significantly higher than outdoors, it usually indicatesthat moisture has entered the home and has not been properly dried.  

• Aspergillus – A common mould that grows in damp indoor environments, especially in wall cavities and on wet plasterboard. Elevated indoor levels compared to the outdoor sample often indicateongoing moisture problems. Some species can cause respiratory irritation and health concerns for vulnerable people. 

• Penicillium – Often found in homes with water damage and grows quickly on damp building materials. When Penicillium appears in high levels indoors or is found on multiple surfaces, it can indicatewidespread moisture and poor drying. It is a strong indicator that the water event was not properly managed. 

• Stachybotrys chartarum – Sometimes referred to as black mould. It only grows when there has been prolonged moisture or saturated materials and does not develop from humidity alone. Its presence is a significant indicator of long-term water ingress and failure to remove contaminated materials. This mould is associated with more serious health concerns. 

• Chaetomium – Another mould strongly associated with chronic moisture exposure. It grows on wet cellulose-based materials such as plasterboard, timber and insulation. Its presence usually indicatesthat materials have remained wet for an extended period and that early drying was not completed. 

• Acremonium – Often found in homes with long term dampness and slow leaks. It can grow in insulation, wall cavities and on wood. Its presence indoors can support an argument that the water ingress was not adequately addressed after the insured event. 

• Basidiospores – Commonly found outdoors and blown in through windows and doors. If indoor levels are similar to outdoor levels, this is normal and not usually related to an insured event. However, very high levels indoors can indicate excessive moisture or ventilation issues. 

• Ulocladium – Frequently associated with water damage and often found alongside Stachybotrys. Its appearance normally means that a significant wetting event occurred and that contaminated materials were not removed. 

Understanding these mould types helps you challenge incorrect statements in insurer reports. If a provider claims mould is environmental without testing, the lab results often tell a very different story. Water related moulds such as Stachybotrys, Chaetomium or high levels of Penicillium and Aspergillus strongly suggest that water entered the property during an insured event and was not properly dried. 

When to Make a Complaint or Go to AFCA 

Making a complaint is often the turning point in a mould related insurance claim. Many claims that start out simple become complex because insurers delay, minimise the damage or rely on providers who fail to follow proper water damage and mould standards. Complaining is not being difficult, it is a necessary part of protecting your home, your health and your legal rights under the policy. A well-timedcomplaint forces the insurer to review the claim properly; escalate it to a more senior team and provide a written decision you can rely on later. If the insurer still does not act or maintains an unfair decision, escalating to AFCA ensures an independent body can assess the evidence and hold the insurer to their obligations. Making a complaint early often prevents months of unnecessary stress and helps stop mould from spreading unchecked. 

Internal Complaint 

Making a complaint is not only your right, but also a formal step under ASIC’s Regulatory Guide 271, which requires insurers to properly record, investigate and respond to complaints within strict time limits. In mould related claims, lodging a complaint early can prevent months of deterioration, delays and incorrect assumptions. Some practical tips include:  

• When you complain, be explicit. Say, I would like to make a complaint pursuant to RG271 so the insurer cannot treat it as general feedback or an enquiry.  

• State clearly what has gone wrong, such as failure to complete a makesafe, refusal to inspect the entire property or incorrect assumptions about mould, and be very clear about the outcome you want, for example scientific testing, a new restorer, a full moisture assessment or a proper drying plan. 

• Being specific protects you later if you need to escalate to AFCA, because it creates a documented timeline of your concerns and the insurer’s responses. A well worded RG271 complaint forces the insurer to engage seriously with the issues and often results in faster and more accurate claim decisions. 

Assessing Contents Damage from Mould – What Insurers Don’t Always Tell You 

Mould does not just affect walls and ceilings. It can also damage furniture, clothing, bedding, electronics and personal belongings, often beyond repair. Yet many insurers reject or minimise contents claims related to mould, arguing that it is environmental or not caused by the insured event. This makes it critical to properly assess the impact of mould on your contents. 

The key issue is timing. Mould can grow quickly, and once it appears on soft furnishings or porous items, they are usually not salvageable. That includes mattresses, lounges, clothes, soft toys and more. If an insurer delays drying or fails to remove wet items, contents may become contaminated as a direct result. 

If your home is impacted by water ingress, follow these steps immediately: 

1. Photograph everything. Take wide and close-up photos of all affected belongings. Show where they were located and any visible mould or staining. 

2. Make a contents list/ inventory. Record each damaged item with a description, estimated value, brand, year of purchase and whether you have receipts. You may need an expert to comment on the item in the inventory to determine if they are salvageable.  

3. Do not dispose of anything without written approval. If you must discard items for health reasons, email the insurer first and request written confirmation. 

4. Ask for scientific testing if needed. If there is a dispute over whether the mould was caused by the insured event, ask for air or surface sampling. 

5. Request a proper assessment. Make sure the hygienist or restorer scopes both the building and contents. Insurers often only focus on the structure. 

AFCA Complaint 

If the insurer maintains its decision or does not resolve your concerns, escalate to the Australian Financial Complaints Authority. AFCA is free for consumers and can issue decisions that are binding on insurers. They take an independent view of the claim and will consider what is fair in all the circumstances, but they place significant weight on expert evidence. If possible, obtain an independent mould assessment or request that AFCA direct the insurer to fund one. Independent testing is often the deciding factor in mould related disputes, especially where the insurer’s own providers have made assumptions, overlooked moisture or failed to follow proper standards. If you believe the insurer has refused to act quickly, ignored early warnings or contributed to the mould spreading, escalate without delay so an impartial decision maker can review the case. Some practical tips include:  

• Include a clear timeline showing when the event occurred, when you notified the insurer and what actions or delays followed. 

• Attach all photos, videos, emails, reports and complaint correspondence in a single document bundle. 

• Highlight specific failures, such as not completing a makesafe, not installing drying equipment or refusing testing. 

• Obtain independent expert evidence wherever possible, including mould testing, moisture mapping or a report from an occupational hygienist or indoor environmental professional. 

• If you cannot afford your own expert, request that AFCA direct the insurer to fund independent scientific testing. 

• Point out any assumptions or inconsistencies in the insurer’s expert reports and link them to the evidence you have. 

• Be clear about the outcome you want, such as proper remediation, temporary accommodation, reimbursement for independent testing or a full reassessment of the claim. 

Health Impacts Should Not Be Ignored 

Long term exposure to mould can cause emotional strain, physical illness and breakdowns in family life. Many people do not realise how much stress comes from living in a damaged home, being displaced from their home or feeling gaslit by an insurer who dismisses their concerns. 

If you or your family are impacted, seek medical support and notify your insurer that you are vulnerable. This triggers additional obligations on the insurer under the General Insurance Code of Practice. 

When to Seek Help  

Claims that involve mould are some of the most complex, contested and exhausting types of home insurance disputes. What begins as a simple water event can spiral into months of damage, delays and denials, often because insurers do not act fast enough or rely on providers who minimise the scope of contamination. 

Many homeowners assume that once the insurer accepts the initial water damage, the rest will be handled fairly. Unfortunately, this is rarely the case. We see a consistent pattern: insurers delay makesafes, leave wet materials in place, reject the need for scientific testing, and argue that mould is environmental or unrelated – even when their own contractors may have caused cross-contamination. As we saw in the AFCA case against Hollard Insurance (Case 906838), a poorly managed remediation job can spread mould to unaffected rooms, leaving the homeowner with health concerns and a contaminated house. Even then, the insurer may try to avoid full responsibility. 

Most consumers are not trained in restoration standards, water classification (such as IICRC S500), or mould causation. And that’s where the imbalance begins. Insurers rely on reports from builders, hygienists or restorers they appoint – many of whom are commercially aligned with the insurer or the loss adjuster. Those reports often downplay the damage or omit critical moisture and mould readings, leaving homeowners unable to prove what really happened. 

That’s why it is essential to seek help early. At Claims Hero, we specialise in navigating these complex disputes. We understand how insurers work, we know what the policy covers, and we know what standards apply when mould is involved. More importantly, we know how to challenge unfair assessments, push for proper makesafes, and obtain independent evidence to support your claim. 

Key Takeaways 

• Mould is not covered on its own. It only becomes covered when it develops because of an insured event, such as a storm, cyclone, flood or burst pipe. 

• Most mould disputes arise because insurers fail to act quickly. Mould can begin growing within 24 to 48 hours if wet materials are not removed and the home is not dried. 

• Water from storms and roof leaks is almost never clean. Once it passes through the roof, insulation and timbers, it becomes contaminated and requires proper removal and drying. 

• Always request both types of makesafe in writing, one for the roof or entry point and one for internal drying and removal of wet materials. 

• Insist that the insurer assesses the entire property, including ceiling cavities, wall cavities and adjacent rooms, not just the visible damage. 

• Document everything. Photos, videos, timelines and written confirmations can make the difference between a successful and unsuccessful claim. 

• Do not accept statements like environmental or humidity mould without scientific testing. No one can determine the cause of mould without laboratory analysis. 

• Watch for red flags such as delays, assumptions, lack of testing, refusal to inspect non-habitable areas, or providers with conflicts of interest or no public reviews. 

• Independent expert evidence, such as mould testing or moisture mapping, is often the most persuasive evidence in a dispute. 

•  If concerns are ignored, lodge a complaint under RG271 and be explicit about the outcome you want. 

• If the insurer maintains its position, escalate to AFCA early. AFCA is free, independent and can issue decisions binding on insurers. 

• Mould can impact physical and mental health. Seek medical support and notify the insurer if you are vulnerable so they must follow additional obligations under the Code of Practice. 

• The earlier you act, the more likely you are to protect your home, your health and your rights under the policy. 

If you are experiencing mould after a water event, do not wait. The earlier you take action, the better the outcome for your health, your home and your claim. 

Claims Hero the Podcast  

You can watch Episode 2 – Episode 2 – Mould and Insurance: How to Handle Claims the Right Way here – https://youtu.be/bQEi82tS474 

Disclaimer 

This guide is for general information purposes only and is not intended to provide legal, insurance or health advice. It reflects the views and experiences of Claims Hero based on common patterns observedin home insurance disputes involving water and mould damage. Every insurance policy is different, and outcomes will depend on the specific terms of your policy, the cause of the damage and the evidence available in your case. 

We encourage all homeowners to read their Product Disclosure Statement (PDS) carefully, seek independent advice where needed, and obtain professional assessments if their home has been affected by water ingress or mould. 

The content in this guide does not substitute for advice from qualified professionals such as occupational hygienists, environmental consultants, legal practitioners or medical professionals. If you are experiencing health symptoms related to mould exposure, please consult a healthcare provider immediately. 

While we make every effort to ensure the information provided is accurate and up to date, Claims Hero does not accept any liability for loss or damage arising from reliance on the material contained in this guide.