Does Homeowners Insurance Cover Hoarding Cleanup Costs?

Hoarding disorder affects an estimated 2-6% of the population in the United States. The condition is characterized by persistent difficulty discarding possessions due to strong urges to save items, distress when discarding items, and clutter that congests living spaces and impairs normal use of the home.

For those suffering from hoarding disorder, the accumulation of possessions can lead to unsafe and unsanitary living conditions over time. When the clutter becomes excessive, it can pose risks including fire hazards, falling hazards, rodent/insect infestation, and blocked access to rooms or exits.

In severe hoarding situations that threaten the structural integrity or habitability of a home, extensive cleanup and repairs may be required to make the residence safe and sanitary again. But here’s the big question for homeowners: does homeowners insurance cover the cost of hoarding cleanup services?

How Hoarding Impacts Homeowners Insurance Coverage

Unfortunately, the answer is generally no Standard homeowners insurance policies provide very limited coverage for professional cleaning, repairs, or other costs related to a hoarding situation Here are some of the key reasons why hoarders will likely get denied coverage

• Property Damage Exclusions – Most policies exclude coverage for gradual damage from long-term exposure to clutter, mildew mold insects, rodents, or other deteriorating conditions. These are considered maintenance issues.

• Gradual Damage – Insurance is designed to cover sudden and accidental loss or damages, not gradual deterioration over time. The accumulation of clutter and related issues in a hoarding home are expressly excluded.

• Pre-Existing Conditions – Damage arising from hoarding or clutter that existed prior to the policy start date will not be covered. This is considered a pre-existing condition.

• Negligence – Failing to address hoarding behaviors that cause or contribute to property damage may be considered negligence. For example not dealing with leaks pests, or other maintenance issues.

• Ordinance or Law – Bringing a hoarder home up to code or making repairs mandated by health/safety laws is not covered.

• Professional Services – The actual cost of cleanup crews, organizers, repairs, etc. would likely not be covered.

• Liability Claims – Injuries to visitors resulting from hoarding hazards may be excluded if the hoarding contributed to the accident.

Insurers generally view hoarding situations as high-risk because the sheer volume of accumulated possessions makes losses more likely to occur and property damages more extensive. The disarray also makes it difficult for insurance adjusters to accurately assess and value claim damages.

Limited Scenarios Where Some Hoarding Cleanup Costs May Be Covered

While hoarding cleanup coverage is extremely limited, there are some specific scenarios where a homeowners insurance policy may pay for a portion of costs:

• Water Damage – If a pipe randomly burst and caused sudden water damage throughout the home. In this case, cleaning and drying costs for the unexpected water damage may be covered, but not the removal of general hoarded items.

• Fire Damage – Flammables make hoarder homes high risk for fires. If a fire resulted from an accident versus negligence, there may be limited coverage for fire/smoke cleanup and repairs. But coverage depends on the fire’s definitive cause and if pre-existing hoarding definitively contributed to damages.

• Collapse – If the sheer weight of accumulated possessions caused a shelf, floor, or structural collapse without warning, some repairs may qualify. But prior damage or deterioration from long-term clutter would not be covered.

• Rodents – If a rodent infestation was sudden, traceable to an accidental exterior entry point, and caused damage, pest removal and repairs to that specific damage may be partly covered. General hoarded clutter removal would not be covered.

• Liability – Injuries to visitors that result solely and directly from a standard covered peril may have limited liability coverage. For example, a guest tripping over a rug where hoarding did not contribute.

The critical point is that even in these scenarios, homeowners insurance will not pay for full-scale hoarding cleanup. At most, there may be limited coverage for damages the insurer deems solely and directly attributable to the sudden covered loss event itself, not the hoarding behavior.

What to Know About New Homeowners Policies and Hoarding Claims

Do not expect a new homeowners insurance policy to cover pre-existing hoarding damages or conditions. The purpose of insurance is to cover damages that unexpectedly occur after the policy effective start date.

If a home already has hoarding issues, clutter, structural damage, sanitation issues, or code violations when a new policy begins, any claims related to those pre-existing conditions will likely be denied.

Insurers investigate the onset and progression of hoarding behaviors when assessing claims. If the hoarding, clutter, and subsequent deterioration demonstrably existed prior to the new policy, the claim will often be disqualified as a pre-existing condition.

New policyholders with hoarding issues should thoroughly document their home’s condition at the time of purchase with dated time-stamped photographs and video. However, even with documentation, any hoarding-related damage arising after coverage starts will likely only receive minimal claim payouts, if any.

Does Renters Insurance Cover Hoarding Cleanup?

For renters, a standard renters insurance policy only provides limited coverage for damaged or stolen personal belongings. It does not cover property damages or cleanup costs for the rented unit itself.

If hoarding and clutter by the tenant results in pest infestations, mold, leaks, or other maintenance issues, the renter would not be able to file a claim under their policy to pay for cleanup or repairs to the rental property.

The landlord’s property insurance may provide some coverage for damages like water leaks or fire that impact the structural integrity of the rented building. However, damages arising from lease violations or negligence by the tenant due to hoarding behaviors would likely not be covered.

Tips for Potentially Getting Insurance to Cover Some Hoarding Cleanup Costs

While hoarding cleanup coverage is extremely restricted under most homeowners policies, here are some tips to potentially get insurers to pay for a portion of costs:

• Clearly document through photographs, videos, and inspection reports that the hoarding disorder began suddenly after the policy effective date, if true.

• File any insurance claims as soon as possible after new damages occur. Do not delay filing claims and let the hoarding situation further deteriorate.

• On claims, emphasize sudden large-scale covered losses versus slow gradual deterioration over time.

• Get dated documentation from a home inspector that the home met basic safety and sanitation codes right before the claimed loss.

• Negotiate reasonable settlement offers with the insurer instead of seeking maximum payouts.

• Offer to have professional organizers thoroughly sort and return any undamaged valuables after cleanup.

• Suggest mediation to resolve any disputes about what should or should not be covered.

• Research the insurer’s specific policies and history with hoarding claims; some companies may allow slightly broader coverage.

Are Hoarding Cleanup Costs Tax Deductible?

If homeowners insurance denies coverage for hoarding cleanup and repairs, some of the costs may be tax deductible in certain situations:

• If the home is used for any business activities, resulting cleanup and repairs may potentially be deducted as a business expense.

• Costs incurred specifically to make the home compliant with health/safety codes could potentially qualify as medical expense deductions.

• Expenses to improve accessibility and mobility within the home for medical reasons may also potentially qualify.

• Payments made for mental health treatment related to a diagnosed hoarding disorder may be deductible as well.

Those dealing with hoarding should consult a tax professional to understand current IRS rules on deducting related costs for both personal residences and business/investment properties.

Using Trusts to Pay for Hoarding Cleanup

To handle the high costs, some families use trusts to finance hoarding cleanup and repairs:

• A special needs trust can pay for support services for a person with a mental health disability without impacting government benefits eligibility. Hoarding treatment and cleanup costs may potentially be covered expenses.

• Upon death, funds from an estate can be placed into a trust earmarked specifically for restoring a hoarder’s home to make it saleable.

• Family members can pool funds into a living trust designated solely for hoarding cleanup purposes on behalf of a loved one.

A estate planning attorney can provide guidance on legally and ethically structuring specialized trusts that pay for hoarding remediation.

Specialty Insurance Policies for Hoarder Cleanup

A few specialty insurers like Lloyd’s of London offer supplementary insurance policies specifically covering professional cleanup costs for extreme hoarding situations that make a home unlivable.

This type of policy provides last resort coverage only when damage from hoarding behaviors necessitates extensive repairs and cleanup that a standard homeowners policy will not cover.

Premiums are expensive and coverage limits relatively low. But for desperate situations, it can be the only insurance option to finance