Indoor Pollution Charlie Kingdollar, Stamford On October 3, 2000, a California jury ordered Allstate Insurance to pay a policyholder $18.5 million in a coverage dispute over mold in the plaintiff's home (Anderson v. Allstate Ins. Co.). The jury awarded the homeowner $500,000 in damages and $18 million in punitive damages after it found that Allstate acted in bad faith with "oppression, fraud and malice in its conduct." Allstate had issued the plaintiff a Homeowners policy that covered a sudden and accidental discharge of water from a plumbing device. The policy, however, excluded coverage from frozen pipes if the home is vacant, unoccupied or under construction unless the policyholder used reasonable care to heat the dwelling or shut off the water. In 1997, several pipes burst while the home was empty due to remodeling work being done at the home. Water was released for several days before it was shut off. Mold and mildew developed in all the rooms. The policyholder took Allstate to court alleging that the payment offered by the insurer was insufficient. The jury found that Allstate acted in bad faith in handling the claim. For the Hazardous Times report on Toxic Mold please click here. For more Toxic Mold claims please click here. Legal Disclaimer: This information was compiled by the General Reinsurance Corporation Underwriting Department and is intended to provide background information to our underwriting staff (as well as to our clients' underwriters). The information may need to be revised and updated from time to time. You should consult with your own legal counsel before relying on it.