One of the most common causes of insurance claims is water damage, which is only slightly behind wind and hail claims. However, many water damage claims are denied, some for gradual damage and other times due to homeowner error when reporting the claim.
Understanding what insurance company's need to approve your claim and the type of damage covered will allow you to be properly prepared and improve your chanced of approval. This article will show you how to properly file an insurance claim so your insurance company will accept and pay.
Many homeowners want to wait until the water has been removed before making the call to inform their agent, but contacting your insurance agent should be the first thing you do. Even before clean-up. Obviously, if you have a water leak that has not been resolved the cause should be addressed immediately to prevent further flooding or damage.
Waiting to clean-up water damage will only cause a larger mess than you already have, and if it isn't reported immediately it could also prevent your insurance company from accepting the claim. There are 2 types of leaks, and your insurance policy will address each differently.
- Chronic Leak - These are leaks that cause damage over a long period of time. It could be a leaking pipe or a roof leak. As a homeowner, you would be expected to resolve the leak in a timely manner. Since the leak has been allowed to continue and cause damage your insurance company will most likely deny the claim as they will see it as gradual damage.
- Sudden Leak - These leaks could be caused by a broken water pipe or some other leakage that occurred without warning. They are most likely covered by your policy.
What is Gradual Damage?
Gradual damage is a common issue with insurance claims. When property damage happens slowly over an extended amount of time it is considered gradual damage.
A small leak in a pipe that over time has caused damage to the wall, floor or ceiling would be considered gradual damage. If you tried to make a claim for damage and repairs to your insurance company, it would likely be denied. Even though the problem may have gone undetected, it would be considered a long-standing problem since the damage was not accidental or sudden.
To the homeowner, it may not seem right that a claim is denied when you weren't aware of the issue until it became a major problem. However, insurance is designed to cover accidental and sudden damages, not damages that have occurred over an extended period of time.
Exceptions to Gradual Damage
Even if the cause of your damage was from gradual damage, it's still a good idea to talk with your agent who can go thru the wording and exact details of your policy with you. All policies exclude gradual damage and normal wear and tear, but there may be an exception written into your policy.
- Mold - Although this varies from state-to-state as well as by insurance company, some companies offer coverage for mold remediation.
- Roof Damage - If your roof was damaged from a tree, your insurance would cover the hole in the roof. If water poured into your house through the hole, any water damage that occurred would be covered as well. After several months, if you noticed mold or signs of mold in the area of the repairs, it would be considered gradual damage. But because it was a result of the original claim, there's a good chance your insurance company would cover the damages.
- Broken Pipe or Appliance - If you have a broken pipe or an appliance such as a washing machine that suddenly and unexpectedly breaks due to wear and tear, the damage caused my be covered under your policy. The replacement of the pipe or appliance will not be covered, but any damage that resulted from the breakage could be.
Filing an insurance claim is never something homeowners want to do, but sometimes it's necessary. Here are a few tips that can help you be prepared throughout the process.
Contact your Insurance Agent
Contact your agent and ask exactly what is required. It's a good idea to check your home insurance policy prior to the call so you can ask for details on anything you are unsure about.
The will usually ask for the following:
- Prompt written notice detailing the cause of the claim.
- Action taken to protect further damage to property.
- Any repairs that you take to protect your property from further damage must be reasonable and necessary.
- Accurately record all repair expenses.
Record the Damage
Even though it's important to begin clean-up as soon as possible, it is also critical to record the damage. If in the future your insurance agent has questions, you'll be able to provide visual proof of the extent of the damage.
- Snap a few photos or take a video of the area before you begin cleaning up. If you have standing water, mud or "simply" mold, having it documented at its worst will help your agent understand the problem.
- Start a list of all your damaged property. Furniture, carpets, appliances, anything that's damaged by the event. having a list with supporting photos could be extremely helpful, especially if you run into problems with your claim.
- Wait to hear from your insurance agent before conducting any permanent or large structural repairs. Your agent may need to inspect the damage personally. If permanent repaired are made before the agent gives approval your claim could be denied.
- Any standing water should be removed and the area should begin drying as soon as possible after you have documented the situation.
- All water-soaked materials should be removed and placed in a dry, well-ventilated area. Do not throw anything out until your agent gives you the approval to do so.
- Use caution to protect undamaged and repairable items from further damage.
- Start a log of all activities that have taken place with your claim. If for any reason your insurance company questions your claim, you'll have facts and details at your fingertips. Include all conversations with your agent, as well as the steps you've taken with clean-up and repairs.
- Keep all of your receipts, even for materials that were needed for temporary repairs. You'll need to provide evidence of your expenses in order to be reimbursed.
- Keep all of the damaged materials and items until your agent gives you permission to dispose of them.
- Work closely with your agent. Don't spend more money prior to reimbursement than you can comfortably live without. If you over-extend financially in the clean-up and repair of your home, you may be left with the bill if your insurance company denies the claim or does not pay the amount your expected.
Unfortunately, homeowners are frequently denied coverage on insurance claims. This is one of the reasons it is so important to contact your agent as soon as possible. He or she will be able to guide you thru the claim process and prevent unrealistic expectations.
However, if you are denied, follow these steps:
- Ask for a full explanation. It's your right to know exactly why you were denied. Ask for the exact policy wording that excludes your claim from being covered.
- Ask at what level the decision was made. There are a number of people who represent the insurance company during the claim process. Each person plays a different role and each should be able to provide you with clarification so you fully understand why your claim was denied. It may have been the agent, or the insurance adjuster, or even a contractor who denied the claim.
- Consider asking for a second opinion. After seeking clarification, if you still feel that the claim should have been covered, you can request a review or a second opinion.
- Ask if the company had a plan or endorsement that would have covered the claim. Although it won't help you this time, you should know if your company offers coverage through an endorsement. If not, you may want to consider a different insurance company if you find one that offers the coverage.
- Seek outside advise or file a complaint. If you feel your claim should not have bee denied, you can hire a licensed professional for a second opinion. There are also consumer advocacy organizations that can help you. Some insurance company's have an ombudsman available to review disputed claims. You can file a complaint or ask for advice by contacting your state insurance commissioner.
Over the last 2 decades, mold insurance claims have increased dramatically. Largely because the public has a greater understanding of the health risks mold can cause if left untreated. This can develop into lawsuits as the individual suffering the affects of mold frequently wants the responsible party to be held accountable.
Often contractors are thought to be to blame for a mold problem. A claim can be filed by the insurance company of the homeowner, and the contractor can file a claim against against one of his subcontractor, who in turn can file another claim.
Also, mold is far more common than people know. It's not possible to remove all the mold spores from the air. Mold spores are everywhere, including every home, and they seek moisture, warmth and organic food to grow. Things that are common in bathrooms, basements, walls, and even under floors and roofs.
In locations with high humidity or after flooding or water leaks, mold spores will quickly find the moist areas. It only takes 48 hours before mold begins growing!