Water damage insurance claims are being targeted by insurance companies since it is the #1 type of property damage claims in Florida.

Most homeowners who report a water damage claim will find out that the insurance company will send a letter stating your “Water Damage Insurance Claim Denied”

Here are some common reasons from the insurance adjuster why your water damage insurance claim is denied:

a. Leak was “gradual”, “long term”, “constant”, “repeated”

b.  the cause of the leak, i.e. a pipe, hose, appliance or any other object had “wear and tear” , “old”, “not properly maintained”

When you run into a water damage claim denial its best to get a good public adjuster in Florida to take another look at the policy to see how they can help you.  It’s common for insurance companies in Florida to tell you that your homeowners insurance claim is denied.  The policyholders who learn how to fight a denied insurance claim are those that succeed in getting their claims paid.

What will you do if your homeowners insurance claim is denied or your water damage insurance claim is denied?

HOW IT HAPPENED

Scenario #1  Water damage that “suddenly” “abruptly” “recently” happened

Background :  You come home from work and see water everywhere.  You try to clean it up and find out where the water leak is coming from?   You don’t see any pipes where water is leaking from?  You call a water mitigation company to help clean up all the water damage so that it doesn’t turn into mold.  The mitigation company opens up drywall to see it’s a cooper pipe behind your drywall that cracked.

IS THERE COVERAGE FOR THIS LOSS??  We will answer this in a little bit.

Scenario #2  Water Damage that according to the insurance company was “gradual” “constant” “repeated” “Long term”

Background:   You are painting your baseboards outside the bathroom and notice its soft and wet.  You remove the baseboards to see its saturated with water and black mold lies behind the baseboards.  You remove other baseboards to find the same problem.  You find water damage under the floors in the bathroom and the adjoining bathroom.  You have no idea when or how this happened.

IS THERE COVERAGE FOR THIS LOSS??  We will answer this in a little bit.

YOU CALL THE INSURANCE COMPANY TO FILE YOUR CLAIM AND THE PROCESS BEGINS

The next day you file a claim with your homeowners insurance company.  A few days later the claims adjuster calls you to find out what happened.

Claims Adjuster  “What Happened” ??

Scenario 1:   I don’t know I came home from work and I saw water everywhere

Scenario 2:  I don’t know, I went to paint baseboards and the wood was soft, I then saw mold behind the wood, and noticed water was trapped under the floors

The adjuster comes to your home for an inspection, writes his estimate, tells you everything will be ok, “we will take care of everything”.   A couple weeks go by you receive a call from the insurance company adjuster telling you they have rendered a decision and will send you a letter.  A month goes by, you have called a few times, you haven’t had any communication with the insurance company, and then a couple weeks later a check arrives in the mail.

Scenario #1 :  The homeowner gets a check for $1,219.34.  They had a $1,000 deductible so the total estimated damages by the adjuster was $2,219.34.  You scratch your head thinking “this seems awfully low.”   Not knowing what to do, you just accept the check and move on with your life.

You receive an estimate to repair everything and to your surprise there is over $18,000 in damages to your property.

Now you have two choices:  1) Just accept this and move on   OR  2) Hire a public adjuster to file a supplemental claim for what we call an “Underpaid Claim”.

Underpaid claims happen in 90% of all water damage claims.  Insurance companies constantly underpay claims because they know most people won’t fight to get additional money they deserve.

Scenario #2:   The homeowner had the adjuster over the house for the inspection a few weeks ago but has not heard anything.  A few more week go by, still nothing.  You make several phone calls.  Now a month goes by without any idea what’s going on with your claim.  This is now almost 4 months since your claim was filed.   Then you get a letter in the mail with big letters saying:

YOUR WATER DAMAGE CLAIM IS DENIED!!

They then include the policy language which reads something like this:

We do not insure for loss:

2. caused by:
3. Constant or repeated seepage or leakage of water or steam, or the presence or condensation of humidity, moisture or vapor, that occurs over a period of 14 or more days, whether hidden or not. In the event this exclusion applies, we will not pay for any damages sustained starting from the first day and instance the constant or repeated seepage or leakage of water or steam or the presence or condensation of humidity, moisture or vapor began;
4. (1) wear and tear, marring, deterioration;

(2) Inherent vice, latent defect, defect or mechanical breakdown;

(3) Smog, rust or other corrosion, mold, “fungi,” wet or dry rot;

GENERAL EXCLUSIONS

1. We do not insure for loss caused directly or indirectly by any of the following. Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss.
2. Constant or repeated seepage or leakage of water or steam, or the presence or condensation of humidity, moisture or vapor that occurs over a period of 14 or more days, whether hidden or not. In the event this exclusion applies, we will not pay for any damages sustained starting from the first day and instance the constant or repeated seepage or leakage of water or steam or the presence or condensation of humidity, moisture or vapor began;

What do you do now that your claim has been denied?   Did you know 73% of all Homeowners claims are denied?

When it comes to water claims denied by the insurance company we have a few tricks up our sleeves that can help get your claim paid.   Don’t worry!  We know how to work around this policy language.

Insurance Companies in Florida are now writing policies that contain $10,000 Water Damage Limits or Water Damage Exclusions

Insurance companies in Florida are leaving homeowners with almost two choices:

Face a big financial loss or face a bigger financial loss

Another words, in over 50% of the policies written you only have two options:

1. Water Damage Exclusion- this means absolutely no coverage for any type of water damage loss (Absolutely insane)

2. Water Damage Limitation of $10,000- this means the insure company will not pay more than $10,000 for any water damage loss (crazy)

Let’s take a look at a policy one of my clients had with a large insurance carrier in Florida who wrote a policy for limited water damage coverage:

LIMITED WATER DAMAGE COVERAGE ENDORSEMENT

This endorsement modifies coverage under the following:

DWELLING PROPERTY 3 – SPECIAL FORM SPECIAL PROVISIONS FOR FLORIDA

For an additional premium, the policy is endorsed to provide the following: Coverage for direct physical damage caused by sudden and accidental discharge, backup or overflow of water or steam from within a plumbing, heating, air conditioning or automatic fire protective sprinkler system or from within a household appliance at the limit shown below or as shown on your Declaration page.

The following is added under COVERAGES:

COVERAGE A, B, AND C – COVERAGES – SPECIAL LIMIT OF LIABILITY

1. Water Damage Coverage
2. The total limit of liability for water damage to covered property as provided by this endorsement is $10,000 per occurrence. This limit applies to all damaged covered property under Coverage A, B, and C combined.
3. This limit also includes the cost of trenching or tearing out and replacing any part or portion of the covered building or other structure necessary to access or repair that part or portion of the system or appliance from which the discharge occurred or caused the backup or overflow
4. We do not cover repair or replacement to the system from which the water escaped, backed up or overflowed.
5. This coverage does not increase the limit of liability that applies to the damaged covered property. Except as stated in this endorsement, we do not provide coverage for any loss precluded by another provision in this policy.

All other provisions of your policy apply.

Did you know that you had a water damage limit on your policy?  Moving forward, the question that begs to be asked will be, did your insurance agent inform you of a water damage limit, did you initial accepting such limit, did you pay extra premiums, etc…

The new wave of protection homeowners from predatory insurance company and insurance agent tactics might be to sue the insurance agent for negligence and what they call “errors and omissions”.

NOTE:  With this exact water damage limit policy language, if you had a cast iron pipe claim, this language provides us an opportunity to work around the language in the policy and get the claim covered.  

Now let’s take a look at a large insurance company in Florida who wrote a policy for a water damage exclusion:

WATER DAMAGE EXCLUSION ENDORSEMENT

For a premium credit, your policy is changed as follows:

1. Under SECTION I – EXCLUSIONS, item c. Water Damage is replaced by the following:
2. Water Damage, meaning, regardless of the cause:

(1) Flood, surface water, waves, tidal waves, tsunami, tides, tidal water, overflow of any body of water, or spray from any of these, whether or not driven by wind including storm surge;

(2) Water, water-borne material, sewage or any other substance which backs up through sewers or drains;

(3) Water, water-borne material, sewage or any other substance that overflows from a sump pump, sump pump well or any other system designed for the removal of subsurface water which is drained from a foundation area of a structure;

(4) Water, water-borne material, sewage or any other substance on or below the surface of the ground, regardless of its source. This includes water or any other substance which exerts pressure on or flows, seeps or leaks through a building, sidewalk, driveway, patio, foundation, swimming pool or other structure;

(5) Escape, overflow or discharge, for any reason, of water or waterborne material from a dam, levee, seawall or any other boundary or containment system;

(6) Discharge or overflow of water or steam from within a plumbing, heating, air conditioning or automatic fire protective sprinkler system or from within a household appliance; or

Here you will see for a $41 credit, this policy holder signed his initials for a water damage exclusion.

A few months after he signed for this type of handcuffed policy, he suffered a cast iron pipe claim.  The cost of his cast iron pipe claim is approximately $70,000+.

So for a $41.00 credit, because this policy holder didn’t think he would have any water damage claim(s), he suffered a $70,000+ loss.

SUMMARY

Insurance companies in Florida are putting the pressure on homeowners.  Not because they are losing money, rather, they simply don’t want to pay claims and make it look like the Florida insurance marketplace is a losing proposition.

Water Damage Limits and Water Damage Exclusions are being forced on homeowners in Florida as a “take it or leave it” proposition.  In some instances, you can still recover money beyond a $10,000 water damage limit and get paid on a water damage claim despite any water damage exclusions you might have in your policy.  This is true even for cast iron pipe claims.

Finally, don’t ever settle for what the insurance company tells you.  If they tell you that the damages are a certain amount, please know this amount is a low-ball figure.  If they deny your claim, have a good public adjuster look at your claim to verify there is no coverage.  DO NOT take the insurance company by their word.