Does My Home Insurance Cover Water Damage?

 
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Water Damage Coverage

We regularly hear from customers that have suffered a Water Damage claim and have either received a denial from their Insurance Company, or are concerned that there may not be adequate coverage available to them. While there are instances where legitimate denials of water damages do occur, often we find that these denials were made in error, and using our extensive claims knowledge, are able to get coverage extended for this damage. Here, we would like to address some common mistakes that lead to a denial, as well as some legitimate reasons that a denial may occur.

It was a "flood"

Your average Insurance Policy does not provide coverage for Flood Damage that may occur at your home, necessitating those in areas likely to be affected by flood to take out separate Flood Insurance. Accordingly, claims for water damage that result from flooding would be denied by your standard homeowners insurance. But was it a flood? Often, what we find in this instance is that the denial is all about the words chosen by the distressed homeowner when reporting a pipe break or roof leak to their Insurance Company. When reporting the claim to their Insurance Carrier, the homeowner mistakenly referred to the cause of damages as a "flood", viewing water intrusion of any kind as a flood. It was not a "flood" as defined by the policy, and once explained, the Insurance Company extends coverage for these damages. When reporting a claim to your Insurance Company, it is important to as accurately and specifically describe what is occurring at your property as you possibly can. For this reason, we strongly recommend contacting your Local Insurance Agent before reporting a claim.

It was vacant

Many Insurance Policies include language that requires that the property be occupied in order for coverage to be available. As a result, coverage can be denied as a result of a property being vacant for an extended period of time. But was it vacant? In the past, we have seen instances where a property owner's efforts to minimize damage by moving content to another property or unit has resulted in an Insurance Company incorrectly determining that a property was vacant and denying coverage. By way of example, one of our commercial customers had been in the process of relocating to a new location when a pipe broke, resulting in significant damage to their offices. As they had already been in the process of moving, they immediately moved the remaining desks, filing cabinets, furniture, and staff to their new location. The staff that was still working at the older facility certainly wouldn't be very productive given the circumstances, so it definitely made sense. While our team was on site and had begun the mitigation services while the furniture was still there, the Adjuster hadn't arrived on site until nearly 3 weeks later! By then all remaining furniture had been moved to their new location and the Adjuster determined the property had been vacant and denied the claim. Fortunately, our file and photos clearly documented that there had been furniture at the property, and we were able to reverse this denial. In this case, moving the furniture and staff to the company's new location made a lot of sense, however this example shows the importance of good photographs of the damages. It's important to keep in mind that your Adjuster is unlikely to arrive on site quickly, so you want to be able to accurately show them what the damages originally looked like.

My Adjuster can't figure out what happened

In some cases, such as claims resulting from a broken pipe or hot water heater, your Insurance Company may request that you keep the item that actually failed so that they may investigate what occurred. Not only does this allow them to confirm coverage, in some cases they may be able to seek reimbursement from the manufacturer. What if they can't determine the cause? While we understand that a claim is an incredibly stressful time and the last thing on your mind is to keep the piece of pipe or the hot water heater that failed, it is incredibly important and supports the claim as you reported it. While uncommon, we have seen instances in the past where the Insurance Company incorrectly determined that the damages resulted from ground water (which is generally not covered) and the hot water heater that ruptured and caused the damages had not been saved. As a result, the claim was denied. While ultimately we were able to support that the hot water heater did rupture, as damages were not consistent with a groundwater issue, keeping the cause of loss is strongly recommended.

My Insurance Policy is a DP-1

In the Homeowners Insurance market, there is an uncommon and incredibly limited policy available through certain Insurance Carriers called a DP-1 (Direct Peril 1). What makes this policy particularly scary is that most homeowners that have this policy appear to be completely unaware of the limited coverage they do have. Essentially, the DP-1 is a policy that is structured to provide coverage for a single (ONE) peril, generally Fire. There is no coverage available should the property suffer ANY other type of damages, such as Water Damage, Storm Damage, Vandalism, etc. Unfortunately, should you find, upon suffering an uncovered claim, that you had such limited coverage, this will result in a legitimate denial and a significant out of pocket cost to the homeowner. We strongly recommend speaking with your Local Insurance Agent to ensure that you are adequately covered for anything that may occur prior to having a claim.

Water Damage is not a Named Peril

There are two basic types of Homeowners Insurance, All Risk and Named Peril. While we strongly recommend an All Risk Policy, should you elect for, or mistakenly take out, a Named Peril Policy, coverage is only available for the perils explicitly outlined in your policy. Should you have a Named Peril Policy and Water Damage is not a covered peril, the damages will be denied by your Insurance Company, making them your responsibility. Named Peril Policies are most commonly sold through online sites and companies offering discounted or bare bones coverage. For this reason, we strongly recommend speaking with a Local Insurance Agent that is able to ensure that you are adequately covered for the things that you may not even think of.

It was not "sudden"

Homeowners Insurance Policies are designed to provide coverage for sudden and accidental damages that may occur to your home. By this, they mean that the damages were not the result of an ongoing problem or maintenance issue such as a leaky pipe under a sink or shingles that were overdue for replacement. While some Insurance Companies may extend coverage for damages that result from "hidden" problems such as a leaky pipe enclosed in a wall, as the homeowner would be unaware it was leaking, it is definitely best to address maintenance issues as soon as you know of them. A denial on the grounds that a maintenance issue such as a leaky pipe, that may have caused damage over weeks or months, was not properly addressed is a legitimate denial. While there are numerous different Insurance Policies available on the market, none are "maintenance policies", making this exclusion very common.

More commonly, we find partial denials as a result of sudden damages that the homeowner failed to have properly mitigated by a professional. As the homeowner does have a responsibility under the policy to ensure timely action in order to prevent further damage and begin the mitigation and restoration process, should additional damages or Mold growth result from lack of timely response, these additional damages may be denied by your Insurance Company. This need for fast response to prevent any additional damages is why your Insurance Company will not require estimates for Water Mitigation Services.

It was not "accidental"

This one should not be a surprise, but we do see this occasionally. Damages that were the result of an intentional act, such as not maintaining heat in a property, are generally not covered. The only exception to this exclusion are damages that result from vandalism committed by someone outside of the home, such as stealing copper pipes, which may result in water damage and which is covered by many Insurance Policies.

We hope you found this information helpful! Should you have a need for Emergency Water Mitigation Services from a company you can trust, please don't hesitate to Contact Us! We have crews available 24 hours a day to assist you!

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