Many homeowners are surprised to learn that their insurance does not cover the damage they sustained when they file a claim. Are you out of luck if you need assistance? If you are able to identify the coverage that you need, it will not be.
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This story could save you thousands of dollars and help you avoid the expense of a hair transplant.
Property owners want to know that their homeowners and business insurance will cover them in the event of a major loss. Jay, a Southern California financial advisor, was certain this is what he expected in January.
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“Over the course of two days, my wife and me noticed a strange, musty, damp odor. We finally traced it to the kitchen, where we found a moist area near the dishwasher. The dishwasher’s intake value was broken and the plumber replaced it.
“This caused more than $30,000 of damage. We had excellent insurance so I assured my wife that we were covered. “I’ll call the claim number and I’ll wager that repairs will begin within the next few days.”
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Jay couldn’t have been more wrong, if he tried. They had worked together for more than 30 years in the same company.
Evan Walker, a La Jolla, Calif. attorney, says that Dennis, most of your readers would find themselves in the same position as Jay. His practice focuses on insurance bad faith.
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Consider these assumptions about your coverage
Would you believe that your insurance policy would cover water damage if you were Jay? Walker, however, knows better and explains why most people wouldn’t.
“Many people believe that homeowners and commercial property policies provide coverage for the most common damage, resulting in costly repairs.
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“Insurance agents communicate the impression that you are covered for almost any event that could occur. However, they rarely tell what your policy doesn’t cover.”
Filled a Claim, Denied
Jay immediately filed a claim at his homeowners insurance company – the largest in America – and was denied. The adjuster came out and denied Jay’s claim! They were in desperate need of their insurance, and the adjuster said “Forget It!”
Why? Did the adjuster want to deny them coverage that they had already paid for? It is not. According to the adjuster’s report, “Your policy does not cover wear, tear, corrosion, latent defect, continuous or repeated water seepage or loss.”
If a pipe burst suddenly while they are at home, and they call in the claim, it will be covered. Walker says that homeowners and commercial property policies exclude a slow leakage over a long period of time even if you don’t know it’s happening. This is something that agents will not tell you unless you ask.
Coverages You Can Get If You Ask
Karl Susman, a Los Angeles insurance broker, says that coverage can be obtained for many losses that homeowners policies are not able to cover. He is also an expert witness in cases of agent malpractice.
These coverages are usually available through an additional endorsement to your policy, according to Susman
Coverage for hidden water damage, steam seepage and leakage. “If Jay had this coverage, the loss would be covered.”
Buried utility/sewer line damage. This policy covers damage to your property from a backed-up sewer.
Insurance for equipment breakdown. Property insurance covers damage due to an external cause such as fire. Equipment breakdown insurance covers damage due to internal forces such as power surges and electrical shorts.
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Coverage for undamaged roof surface coverage. Insurance policies usually only cover damaged roof sections, which can sometimes make it difficult to see. Even if a part of the roof is damaged, this endorsement will cover the entire roof.
Insurance that covers identity theft. It is often assumed that it is included in your standard policy. You must purchase it as an endorsement.
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Home-sharing insurance. Are you planning to rent your home out for Airbnb? Your homeowners insurance will be suspended. Home-sharing insurance protects you when guests are present in your home.
Susman ended our interview by stating, “A knowledgeable agent can write a policy that contains these endorsements. But you must add them to your own policy.” These endorsements are not common.
Brokers and insurance agents are not legally allowed to inform you about the coverages available. These coverages are available only if you ask. You can ask your broker or agent to find one that has them if one carrier doesn’t have them. Don’t assume your agent is right when they say that these items aren’t available.
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Jay’s water damage claim and the bottom line? Two lawyers who are experts in suing insurance companies for denial of claims due to bad faith were able to review Jay’s insurance policy. Both of us agreed that the exclusions contained in his policy were valid. The company was not responsible.
