Why Your Insurance Company Won’t Pay for Your Water Damage
When you’re suddenly struck by water damage in your home or business, it can feel like everything is working against you. After faithfully paying your insurance premiums every month for years, you expect that your provider will hold up their side of the arrangement and help pay for repair costs.
Unfortunately, not all water damage incidents are covered by homeowner’s insurance policies and insurance companies often cite the fine print as justification for denying your claim. When your water claim is denied, you may be wondering if and how it is possible to get your insurance company to pay for water damage.
At Avner Gat Inc., our team of public adjusters has worked on hundreds of homeowners insurance claims and helped our clients to negotiate with their providers for fair payouts. In our experience, families find it difficult to understand how their provider makes coverage determinations, particularly in regards to insurance claims for water damage.
Insurance policies are complex legal documents full of contingencies and fine print that are designed to protect the interests of the insurance company. Though most of us have no choice but to accept the terms presented by our providers, we often don’t fully understand how all of the intricacies of these contracts can complicate the compensation process.
We sat down with our founder, Avner Gat, to answer some common questions about the topic:
Why do insurance companies deny water damage claims?
Every case is a bit different, but oftentimes, I see insurance companies denying claims based on a provision in the homeowner’s insurance policy that specifically excludes damage caused by repeated seepage and leakage. Essentially, what that means is that if the accident that led to the water damage is not ‘sudden and accidental’ like a burst from pressurized fresh water pipes, then it can’t be considered a covered loss.
Claiming that the water damage your property incurred wasn’t sudden and accidental is one of the most common reasons that water damage claims are denied. If your provider is denying your water damage claim, it’s important to ask your insurance adjuster questions about exactly why and under which conditions of your policy they are doing so.
Could leaks and seepage ever be considered ‘sudden and unforeseeable’?
Typically, leaks happen gradually. The damage accumulates over time. Insurance companies feel that it is the homeowner’s duty to stay on top of maintenance and plumbing issues in their homes. That means that they expect you to identify the problem and take action, sooner rather than later.
If you procrastinate dealing with the repairs, this is considered negligence on your part and can be used by your insurance provider as legitimate grounds to reject your claim. Under their terms, you did not uphold your responsibility and thus, they do not have to uphold theirs; paying for the water damage repair costs.
What happens if I didn’t find the leak right away?
Not all leaks will be obvious and noticeable. In fact, I’ve spoken with many homeowners who didn’t uncover the leakage until the damage was done. When that happens, these homeowners call me and say the insurance company denied the claim because of a slow leak inside the wall or under the flooring.
These families are in a very difficult situation. They explain that they didn’t see the leak and ignore it, they just didn’t know what was happening inside the walls. When the effects of the leak aren’t visible right away, families struggle to understand why their insurance provider won’t pay for water damage repairs.
Of course, these homeowners have a good point! They weren’t being negligent and avoiding routine maintenance. From their perspective, the damage did appear quite suddenly. However, the insurance companies see the situation differently, which is why they avoid offering coverage for leakage and seepage.
Why do insurance policies exclude leakage and seepage?
When I talk to homeowners about these exclusions, I find that it’s helpful to explain using health insurance as an example. Your health insurance policy may look quite different from other policies. For example, if you’re an elite athlete, you might take out a specific policy on your arms and legs. On the other hand, if you work as a model, you may need insurance for specific facial features.
Before issuing a quote for coverage, insurance companies take your unique risks and needs into consideration. They know that no one wants to go to the doctor, but they may also look at the specific riders and coverages you’ve requested and conclude that you’re very invested in maintaining your health. This could ultimately lower your premium.
In the same way, when a homeowner’s insurance company issues a policy, they must first calculate their risk. Insurance providers want to offer coverage for events where they know they’re working with the homeowner, and both parties are equally invested in preventing the damage.
From the insurance companies’ perspective, they cannot insure accidents like leakage and seepage, because the company wouldn’t know about hidden leaks either. They don’t want to assume responsibility because they cannot calculate their risk. Insurance providers only want to cover events where they know that homeowners will act immediately. In fact, some companies may even limit the time you have to respond to damage – counting down from the moment the accident happens until you take action.
What kind of immediate action do I need to take for the insurance company to pay for repairs?
Taking action doesn’t have to mean filing a claim! If you notice a small leak in the kitchen sink, it will usually benefit you more to pay for the repairs yourself. It would be reasonable to call a plumber on your own rather than file a claim and pay a steep deductible. If you aren’t sure where the leak is, it could be worthwhile to consult a leak detection company.
In such situations, you need to keep receipts and records so that you can prove you actually did something. Whether you contact a professional or do the work yourself, save the receipts so you can show your insurance company you’ve been proactive. This way you can prove to your provider with documentation that you have indeed fulfilled your responsibilities.
In some cases, it may be tempting for homeowners to misrepresent when the damage occurred if it looks like their claim will be denied. Please note that insurance companies have ways to find out how long it’s been since a water damage event took place. For example, they may look for abnormalities with the water bill or gas bill. If they can prove the damage was ongoing and left unattended, they won’t cover it.
More importantly, they may take further action against you if they believe the deception qualifies as fraud. It is always better to represent yourself and your situation accurately because the risk of deceiving the insurance company is often greater than the reward. Their business revolves around protecting their investments and they have developed the tools to detect deception through decades of dealing with fraudulent claims.
How can working with a public adjuster benefit my insurance claim?
As public adjusters, we have decades of experience interpreting the intricacies of insurance policies and identifying the many ways in which providers word them to protect themselves. Just as you might have a lawyer review a contract for an important business transaction, we can comb through your policy and alert you to any clauses you may not have been aware of or understood clearly.
Based on your individual policy, we will then ask you questions about the timeline of the water damage incident that will directly impact the potential validity of your claim. The more details and documentation you are able to provide us with, the more we will be able to fully understand your particular situation and find ways to work on your behalf. Armed with your side of the story, we will negotiate with your insurance adjuster in pursuit of fair compensation for your water damage insurance claim.
Avner Gat, Inc. has 17+ years of experience as a public adjuster in Southern California. We protect homeowners from the games and fine print that insurance companies are known for.
Call us at (818) 917-5256 to find out how we can assist you.