Being in the water damage business, I deal daily with insurance adjusters from all the major property insurance carriers answering their questions regarding our invoices and our technicians’ water damage restoration protocols. While the way insurance claims are handled seems like a mystery to most average homeowners, to a water damage specialist like us, it is really very clear.
Home owners insurance is purchased by homeowners when their home is in good order, clean and healthy. This is very much like a life insurance policy is purchased when you are generally alive. The same way life insurance will be denied to anyone who seems like they may take advantage of it, homeowners insurance is often denied to residents that clearly don’t take a good care of their property.
Homeowners insurance wants to see routine maintenance done to the property, and most importantly – any red flags or problems not ignored or their treatment delayed.
Generally speaking your homeowners insurance will cover any claim that arises from what we call “a sudden cause”. This could include burst water heaters and pipes, exploding dishwashers, toilets and overflowing tubs. If you’re a good homeowner, handle all maintenance issues in a timely manner, and all of the sudden wake up to find your floor is covered in several inches of water? You have a much better case against your insurance company.
Please be careful when considering filing claims that have to do with ongoing damage. While some homeowners do have mold insurance that covers their property up to a certain dollar cap, you should know that rarely the amount of coverage would actually be sufficient to cover the cost of repairs in case of extensive mold damage. For the less extensive jobs, it is clear that it’s best to pay out of pocket and not involve the insurance at all. Any kind of damage like a slow pinhole leak to a pipe, a dripping ice maker in the fridge or a leaky toilet or incorrectly sealed bath or shower, will likely to not be covered since they are attributed to a certain negligence by the homeowner.
If your situation is at all in a “gray area” between the above mentioned two sets of cases, you would be well served by a statement from your plumber, or another professional who will confirm the specific cause of the leak.
What to do about deductibles?
You have a high deductible on your policy? $500? $1000? Or even more? My honest advice would be to try and work out a deal with your contractor to help you with this charge. Your contractor would write up the invoice for the job at a certain amount, bill your insurance, who would in turn send you a check for that billed amount less any deductible amounts you may owe based on the agreement of your policy. Let me tell you a professional secret – water damage restoration is a very lucrative industry. While the specialists you hire do perform legitimate and absolutely necessary service, they also get paid by insurance amounts which leave them often with quite a bit of wiggle room. Your property cost $10K to repair? I think it’s fair for you to ask your contractor to absorb your $500 deductible, or at least split it with you.
My insurance says I have to use their contractor?
Your house is flooded, you’re stressing, you don’t know who will pay, when, how will it all get fixed, and the emotional toll of a home emergency that comes unexpectedly is always high for you and your family. You call your insurance agent who tells you to file a claim, and the adjuster tells you not to worry, just call Water Damage Company ABC and they’ll take care of everything for you. This is a common scenario. Should you call this contractor? I recommend you always go with the contractor you feel most comfortable with, regardless of if it’s the one recommended by your insurance or not. The fact of the matter is your insurance will work identically with a company they “refer you to” or to a company you contract on your own.
Insurance professionals may have different reasons to recommend you call a specific company. It could be based on a company wide policy to refer only to a specific company, it could be a company from a list of merely “suggested” contractors, it could be based on a personal relationship with the owner of the company, or based on any number of backend deals or agreements you may not be aware of. When given a phone number of a contractor who could solve your problem you should remember 3 key points.
1.Always check references, license expirations, liability insurance, BBB rating, and any other means that would help you establish that you’re dealing with a good, legal, licensed, reputable company. Don’t be ashamed to speak to the owner or a past customer, even in a time of emergency – to make sure that you are comfortable with all aspects of the contractor and their water damage restoration protocols.
2.Your insurance is obligated to pay for the repair of all items to their pre-loss condition on any covered claims whether you choose the contractor suggested by your insurance, or you chose one yourself.
3.In the state of California, all water damage restoration contractors are governed by the CSLB, the California State Licensing Board, and all clients of contractors are guaranteed by law the ability to cancel any contracting agreement with no questions asked within 3 days of signing anything unless clients specifically waive this right. You realized after a small delay the guys you’re working with are not the ones you want to? You should be able to get them off the job immediately with no explanations and have to pay ONLY for what was already performed. Read any contract with very carefully and watch out for a waiver for this right within the contract.
Please note that this article gives nothing but some general guidance. There are so many types of insurance policies, and insurance carriers with different rules that we cannot possibly predict whether your claim will be covered in any given case. To find out if a certain problem is covered by your insurance please read your own policy carefully, and then consult your insurance professional.