Need advisement on a homeowners insurance claim?

Question

Here's a brief description of the situation:

I bought my house 2 months ago. About a week ago, I noticed that the carpet was wet in my den next to my kitchen. I called American Home Shield (home warranty company) and have had several technicians come look at it. One technician said it was the dishwasher (it wasn't). Another technician said the HVAC unit is leaking (not sure if this is the cause, b/c HVAC hasn't come to look at it yet)

The water leak that I thought was confined to this area next to the kitchen, has extended through my den, and into the hallway outside of the utility closet. The kitchen sink, dishwasher and HVAC, washing machine all share the same wall.

I filed a homeowners claim today. They sent a company specializing in mold mitigation and clean-up out to my house already, where he has setup fans and a dehumidifer to dry it out, and is awaiting further instruction from adjuster.

(Adding additional details)

Answer 1

Well it's hard to know anything until you are positive on what you are dealing with. We did have a similar experiende. A pipe broke under our house (a drain pipe), and it leaked and spread very much as you have explained. We have State Farm. They were great. Immediately we had the mold mitigation team in and working. They paid for everything which ended up being Pipe replacement, foundation repair, carpet replaced (throughout house because of tracking and it being a drainage pipe), then a cleaning service because of all the dust and mess it made (I just had a neck surgery and wasn't able to do anything).  There was like $95.00 on the replacement pipe we had to pay and our $500.00 deductible. It was a horrible mess, but State Farm made everything as right and quickly repaired as they could. Most of these major things are covered. I hope you get yours repaired quickly and wish you the best of luck.

Answer 2

1) Will my homeowners policy cover this.

It depends on the cause of the water.  If it's flood, high water table, seeping foundation, etc, that is NOT covered under a homeowners policy.

2) I had a home inspection before I bought the house, and there was no mention of a water leak in the inspection report. Is it possible for me to ask the home inspector to cover some or all of my deductible ($1000)

Heck, you can ask, and you can ask for him to cover the whole claim (since if it's been ongoing, and it's likely flood and excluded, or could be pre-existing and the prior owner could have already been paid for it), but he's not going to do it.  I'm sure the inspection paperwork had a "if we missed anything, it's not our fault" clause.

3) What do I need to look out for while making the repairs and going through insurance. What are the pitfalls?

Well, assuming this is covered, you have to see what the mold coverage is under your policy.  Most homeowners policies either totally exclude mold, or have a very limited amount of mold coverage.

Meanwhile, just MAKING this water claim, is going to red flag your account - because if this is NOT covered, and you can't afford to fix it out of pocket, well, the insurance company is going to require it gets fixed, even if it's not covered - OR, they will cancel you.  And once that happens, you're not going to find a company willing to write this policy for you, with existing damage.  

So . ..  if it were me, I'd try d**n hard to figure out where the water is coming from, BEFORE filing the claim.  Take pictures, don't throw anything away, and READ YOUR POLICY to see if there's a time limit you have, to file a water damage claim.

Answer 3

1 - regarding the rot --- rot is usually excluded from most homeowners insurance policies. It depends how your company approaches a situation like this. Each company interprets the policy differently. So I can't tell you what your company will do.

I can tell you what I would do.

The company I work for would probably handle it this way.  -- not cover any of the rot damage. Also damage that happens over a period of weeks/months/years is excluded.

But, I could make the argument that the first time the leak happened (or the first days following) the water would have damaged the carpet/pad. So, I  could pay you for the damage that would have happened in the first few days of the leak. That would probably be clean up, carpet, pad.  I would not cover the entire claim......and probably not even most of it. But I'd cover what I could to help you out.

It all depends on what type of policy you have and the language in it.

2. regarding the home inspection -- it depends on what the source of the leak was. The inspector can't see every thing that could possibly be wrong. Since you don't know the source of the leak, we can't say if its something he should have caught. From what your saying, you have lived there 2 months and just now see water on the floor. It's possible (that depending on the source of the leak) the inspector may not been able to see it in the few hours he was inspecting the home. Was water turned onto the home when he looked at it? If the home was empty - then the water was probably shut off and if there is no water going into the home, the leak will not show itself.  You will have to read the paperwork you got from the inspection and talk to the inspection company.

3. There's not really any pitfalls to look out for. The best thing to do is ask the adjuster questions. There is a good chance that the homeowners policy will not pay for all of the damage.

It's not because insurance companies don't like to pay. As an adjuster, it's much easier for me to pay your claim than to deny it. I'd rather pay it. But....

There are 2 exclusions in many  homeowners policies that could  apply 1. wet and dry rot are excluded,    2. damage caused over a period of weeks/months/years is excluded.

Insurance policies are intended to cover things that are sudden and accidental. (Your hot water heater goes out while you are in the shower and floods the house). Things that happen over time are excluded.  If insurance companies did not exclude this type of damage, people would have no reason to do maintenance on the home "because the insurance company will take care of it."  So a slow leak that you know about would not get fixed.

This also means, hidden leaks that you did not know about are also not covered.

Make sure you get a good contractor. The insurance company will be able to provide some names of reputable ones in your area. But you can use the contractor of your choice.

You can also do some of the work yourself. So, the insurance company will pay to paint the walls. But if you don't mind grabbing a paint brush and doing the work yourself....that's ok. Many people will do some of the work themselves as a way to try and off set some of the deductible.

My attitude is more power to you if you (or someone you know) can do the work. I'm going to pay the same amount either way.

Sorry you are having to deal with this and that I'm probably not telling you what you want to hear.

The adjuster handling your claim will be better able to answer your questions -- since they know what policy form you have and the language in that policy.

Good luck.