Should my homeowners insurance cover this?

Question

I bought my home 3 years ago this month. Last summer I discovered a crystal formation growing on the exterior wall of my spare bedroom. I contacted my insurance company, an adjustor came out, had to contact a guttering specialist because the adjustor had seen nothing of this nature. Turns out, back when the house had new guttering installed (prior to my owning it) they put the drip lip on instead of a guttering apron. As a result whenever it rained the water went down the exterior wall causing extensive damage. The insurance took 4 months to decide they wouldn't pay because it was wrong by design, however, since they came and did an inspection before I purchased the home, shouldn't it be their fault for not finding this error? Please only respond if you have a clue.

Answer 1

No. They are not responsible.

The insurance company provided you with a home owner policy-- not a home warranty. When they inspected the home, they were making sure that it met their underwriting guidelines and qualified for coverage with their company. It is not their job to find improper building practices. This is what you hire a home inspector to do.

As a part of your purchase, you should have had the home inspected by a certified home inspector. However, even that will not catch everything -- it will catch a lot, but somethings (such as water problems) may not show up if it is not raining.

Your homeowners policy specifically excludes damage caused by manufacturer defect, construction defect. The adjuster was correct. This is not a covered loss.

After the adjuster inspected the loss -- the file was probably reviewed by the higher ups. The company took time to look into the problem and give the claim in depth consideration before they reached an opinion. So, would you rather they not have given your claim the consideration it deserved and just made a snap decision and denied you the day after they inspected it? Would that have made you feel better? Probably not.

If you know what company did the improper installation of the gutters - you may have recourse against them. However, you have no recourse against your home insurance based on the info you provided.

**EDIT - Rot is specifically excluded in homeowners policies.  They will not cover this. It does not matter if you could not see it. It does not matter that you did not know about it. Rot (wet and dry) is specifically excluded.  I have never heard of a homeowners policy that provided coverage for rot.

If the guttering was on wrong when you purchased the home 3 years earlier, it's a pretty safe bet that the rot  was present well before you discovered that the gutters were improperly installed. You are going to have a very hard time saying that the 4 months (and not the 36 prior to it that you owned the home) caused the rot and therefore the rot is the fault of the insurance company.

Most insurance policies also exclude damage that happens over a period of "weeks, months or years". Your loss is going to fall under this exclusion too.

You also have a duty to "mitigate your loss". That means to make it not worse. Once you discovered that there was a leak, you have duty to prevent the leak from getting worse -- to prevent further damage. That's why you have to put plastic up to cover a broken window or put a tarp over a hole in your roof.

So, once you discovered the improperly installed gutter, what action did you take to keep the leak from getting worse?

Your duty to mitigate your damage does not depend on the insurance company making a payment. You have this duty because you own the property.

Does your situation suck rocks? Sure.

And as bad as it sucks, it's still not a covered loss.

Sorry.

Answer 2

First of all, most likely mold is excluded from your policy.

The insurance company took four months, because this was something unusual.  That "inspection" doesn't change what is and is not covered, under the policy terms.  And if you look at the home inspection paperwork, for the inspection you paid for, there's a "if we missed something, it's not our fault and you can't sue us" clause.  

I would talk to your agent - I would strongly suggest that the guttering, which was installed incorrectly, is NOT covered.  But the ensuing water damage, MIGHT be covered.  Your policy might have an exclusion for water damage that occurs over a period of time, but most of the time, water damage time periods start from the day YOU FIND the damage.  

Also, you probably do need to complain to your state insurance department, however, if the water damage exclusion is written into your policy in such a way that the invisible damage is excluded, it's probably not going to do any good.

I hope you've fixed the guttering.  

You could also talk to an attorney, about suing whoever installed the guttering backwards.