Nearly half of Australians dealt with mould at home in the past year, yet only 37% recognised that insurance may respond in certain circumstances, according to new research that gives brokers a timely prompt to revisit policy wording with clients as the humid season approaches.
The survey, commissioned by iSelect and run by Pureprofile in July 2026 among 1,020 respondents, found 45% had experienced mould in the past 12 months. Among those affected, 25% managed the problem themselves, 7% paid professional cleaners or removal specialists and 8% reported it to their landlord. Another 5% noticed mould but took no action.
On coverage, 9% believed mould damage is always covered, 22% thought it never is and 32% were unsure. The remaining 37% identified that cover may apply in certain circumstances, such as when mould follows storm damage or a burst pipe, subject to policy terms.
iSelect public relations manager Sophie Ryan said the findings highlight the importance of understanding a policy before making a claim.
“Many Aussies may be surprised to learn that mould isn’t automatically covered but may be in some circumstances,” Ryan said.
“In certain situations, mould damage could be covered, but it depends on the cause of the mould and the specific terms, conditions and exclusions outlined in the specific policy.”
“For example, if mould develops as a direct result of an insured event, such as storm damage or a burst water pipe, there may be cover available. However, mould caused by long-term moisture issues, gradual deterioration, poor maintenance or preventable wear and tear is often excluded,” she said.
The Insurance Council of Australia, in guidance updated in July, says mould risk is mainly linked to retained moisture rather than elapsed time alone. It advises policyholders to report water damage promptly and hold off on repairs until the damage is assessed, steps brokers can relay to clients after a storm or pipe failure.
Among affected Australians, 29% spent $100 or more dealing with mould. “While many households are spending smaller amounts on cleaning products and preventative measures, mould can become a much more expensive problem if it’s left untreated,” Ryan said.
The confusion is not new. iSelect research reported last October found 73% of New South Wales and 72% of Queensland respondents did not know whether their insurance covered mould damage.
The wording behind many exclusions is also under scrutiny. On Aug. 5, the Australian Competition and Consumer Commission issued a draft determination proposing not to authorise the Insurance Council’s bid to standardise “taking reasonable steps to maintain” and “wear and tear” in home policies. It warned that examples such as rising damp, rust and rot could deter valid claims because they can result from an insured event.
The council told the regulator that denials citing maintenance and wear and tear rose from 9.2% of all denials in 2020 to 51% in 2023. A 2023 review by the General Insurance Code Governance Committee found nearly half of the maintenance and wear-and-tear denials it sampled were later overturned on internal review.
“The Insurance Council’s proposed definitions did little if anything to address these issues, and the ACCC has made that very clear in its proposal to not grant authorisation,” Drew MacRae of the Financial Rights Legal Centre said, urging the federal government to fold the terms into its work on standardising natural hazard definitions.
The ACCC’s register lists a final determination for September and still showed the application as under consideration when reviewed. Until a standard emerges, definitions will keep varying by insurer, so reading each Product Disclosure Statement closely remains part of broker advice.
“If you’re unsure whether your policy provides cover for mould-related damage, now is a good time to check your Product Disclosure Statement or speak with your insurer,” Ryan said. “Understanding what’s covered before you need to make a claim can help avoid surprises when you need support most.”
Home and contents quotes in the five largest capital cities rose an average of $373.93, or 14.78%, in the 12 months to June 2026, according to Compare the Market. iSelect urged consumers to avoid underinsurance, consider a higher excess they can afford at claim time, and compare policies.
