Fungi on a CEA Policy

What is Fungi on a CEA policy?

Why does Fungi matter for Earthquake Policies?

Fungi on the CEA Policy Form:

The word Fungi is listed approximatly 12 times on the the BEQ-3B (01-2019 edition) California Earthquake Authority Basic Earthquake Policy for Homeowners. Fungus can also be found once. What is most interesting about Fungi as it relates to CEA policies is that it is listed as a definition on that policy, in the exclusions, and it can also be found in the sublimits section.

Fungi, a Matter of Definitions:

The CEA definition of fungi is pretty specific: ““Fungi” means all types of fungus, including but not limited to mildew and mold, and all of their resulting spores and by-products, including mycotoxins and allergens, but not including cultivated edible mushrooms or other cultivated fungi intended for human consumption.”

It should be noted that this is NOT the same definition that is found at Dictionary.com where fungus [the singular of fungus] is defined “any of a diverse group of eukaryotic single-celled or multinucleate organisms that live by decomposing and absorbing the organic material in which they grow, comprising the mushrooms, molds, mildews, smuts, rusts, and yeasts, and classified in the kingdom Fungi or, in some classification systems, in the division Fungi (Thallophyta) of the kingdom Plantae.”

The major difference we note is that “cultivated edible mushrooms “are likely a fungus in the science sense but NOT a fungus in the CEA sense. The CEA is pretty clear that mold and mildew are included as well as “all of their resulting spores and by-products, including mycotoxins and allergens.” The CEA is also relatively clear that their definition includes “all types of fungus” – with the one exception that we previously discussed. Hence the CEA definition of fungus is quite broad.

Fungi, Sublimits, Exclusions on the CEA Policy Form:

Why are Fungi Important on a CEA homeowner Earthquake Policy?

Fungi are important because – “all loss or damage to the dwelling or to wall-to-wall carpeting attached to the dwelling” that is “caused by fungi the presence of which directly results from an earthquake that commences during the policy period as part of a seismic event…” shall have a sublimit of “$5,000”. The exact spefics of this are a bit more complex. But those are the basic facts. More on CEA sublimits.

Additionally under “Losses Excluded” Point 6 – “Fungi” including but not limited to the cost to repair or replace property damaged by fungi or to test for, monitor, abate, mitigate, remove, dispose of or remediate fungi, except for loss or damage to the dwelling or to wall-to-wall carpeting attached to the dwelling caused by fungi the presence of which directly results from an earthquake that commences during the policy period as part of a seismic event that commences during the policy period, and subject to the $5,000 sublimit set forth in “Special Limits of Insurance—Coverage A,” Item 2.” More on CEA Exclusions.

Fungi is found therefore in both the sublimits AND the Exclusions. When you consider in the fact that Fungi is included in the definitions – than fungi is listed in three separate sections on a typical CEA policy.

Important Considerations for Fungi on CEA Policies:

Remember it is important to review the exact specific definition of Fungi on the CEA form. They are very clear that it includes mold and mildew and “all types of fungus…” The Full CEA fungi definition is ““Fungi” means all types of fungus, including but not limited to mildew and mold, and all of their resulting spores and by-products, including mycotoxins and allergens, but not including cultivated edible mushrooms or other cultivated fungi intended for human consumption.”