Water Damage and Faulty Workmanship

| July 1, 2009

Homeowners should choose words wisely when reporting a claim to an insurance company for a loss or damage to their home caused by water.

A surefire way to have an insurance company deny a water damage claim is to report it as a flood. Flood coverage is not an insured peril under standard homeowner insurance policies. To be protected for the peril of flood, homeowners must purchase a separate flood insurance policy through the National Flood Insurance Program.

Before placing a call to the claims department to report a water damage claim, review the policy to ensure there is coverage. Basic homeowner policies (HO1) do not include coverage for water damage while the more comprehensive form (HO3) does. After confirming
Water Damagecoverage, be sure to use the correct terminology when speaking to the claims representative. Report the claim as a water damage claim and not a flood claim. The minute a claims handler hears flood, the first response is to deny coverage.

Determine the Cause of the Water Damage.

Prior to calling the claims department to report the loss, spend a little time determining the direct cause of the claim and separating the cause from the damage. For example: A homeowner hires a plumber to connect the water line to the ice maker/water dispenser of a newly purchased refrigerator. A day or so later, the homeowner notices the new bamboo kitchen floor is warping and directly below the warped floor in the basement there is evidence of water damage on the ceiling. While observing the damaged basement ceiling the homeowner also notices that she’s standing on wet carpet.

Upon investigating the source of the leak, the homeowner traces the leak back to a faulty hose connection to the refrigerator. The direct cause of the leak is the plumber’s failure to properly connect the hose to the refrigerator. The ensuing water damage includes the warped kitchen floor, the damaged basement ceiling and the water logged carpet.

What Will the Insurance Company Cover?

The insurance company most likely will not cover the cost of fixing the faulty connection to the refrigerator. The homeowner will have to contact the plumber in order to have the faulty leak fixed. The insurance company will pick up the ensuing water damage caused by the leak.

Faulty Workmanship and Ensuing Water Damage

Not all faulty workmanship and water damage claims are so clear-cut. Depending on the terms of the insurance policy, a company may deny a water damage claim resulting from faulty workmanship if the damage occurs over an extended period of time. Insurance policies are designed to cover sudden and accidental water damage loss.

Long-standing moist conditions usually give rise to mold. Mold cleanup is expensive and most often excluded from the homeowners policy. Therefore, if the same refrigerator leak as used in the example above was a small constant drip and went unnoticed until it eventually caused mold, mildew and rotting drywall, the insurance company would most likely deny the claim because of the length of time involved in creating the damage.

No two water damage claims are alike and it is strongly recommended that homeowners not only review their insurance policy to see how it responds to water damage, but also take into consideration the length of time the offending condition has been in existence.

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Category: Insurance

About the Author ()

Felicia A. Williams is a wife, mother, freelance writer and owner of Tidbits and Stuff.

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