There is a common misconception that a property insurance policy also covers the causes of many common home and business losses. It is important to understand your policy and the limitations of its coverage. Any questions should be directed to your agent or other insurance company representative. Here are some typical examples of situations in which the damage is covered but the cause of the problem is not.
In the event a hot water heater should burst and flood your home or business, the damage to the flooring, walls, furniture, etc. would typically be covered by your policy. However, the costs for the replacement of the hot water heater unit would not be covered.
If the shower pan in your shower stall should fail, any damage caused by the leak and whatever measures are necessary in order to replace the shower pan, such as removal and replacement of the shower stall walls and floor (ceramic tile, simulated marble, etc.) would in most cases be covered. However, the actual cost of the shower pan itself would be the insured's responsibility.
An insulated window looses its vacuum and begins to leak around the window perimeter during heavy wind driven rains. In this example, there is no storm related damage to the window nor is there any evidence of vandalism or neglect. It is determined that the window has simply failed due to improper installation or defective workmanship on the part of the window manufacturer. Any damages such as water stains to the walls or damage to the carpet would, in most cases, be covered. However, the cost of repairs or replacement to the window unit would be the insured's responsibility.
An attic mounted A/C unit drain line stops up, overflows, and damages the ceiling, walls, carpet, and furniture. The repairs to all the aforementioned items are generally covered but the repairs to the A/C unit are the insured's responsibility.
Typically, damages that are a result of normal wear and tear, improper installation, defective workmanship, age, neglect or lack of maintenance are usually not covered.
For example, a fifteen-year old wood shingle roof shows no evidence of storm related damage from wind or hail. The shingles are extremely weather split, they are beginning to cup and curl, and it is obvious the roof is simply worn out due to age and normal wear and tear. In this case, coverage will probably be denied.
In the event there is extensive deterioration, where it is obvious the problem has been occurring over a long period of time, and the insured has failed to take the appropriate measures to correct the problem, coverage may be denied. A shower stall leak is an example of a common problem. Tests show there is no evidence of a plumbing leak or shower pan leak. Further examination reveals extensive deteriorated grout in the ceramic tile, which is the source of the leak. In this situation, coverage may be denied.
Surface water flood damage is usually covered only if the insured lives in a flood plain and carries government sponsored flood insurance.
Termite damage is generally not covered unless it can be proven that the termites were drawn to the area because of a plumbing leak.
Foundation repairs are typically not covered unless it is determined that plumbing problems such as a slab leak causes the foundation problems. Damages caused by a structure's foundation shifting due to unstable soil are not normally covered.
There are always exceptions to the rules and most insurance carriers generally handle losses on a case-by-case basis. For example, a shower stall plumbing line has been leaking over a long period of time. Only recently has visible evidence of the leak occurred. During the course of the repairs, it is also found that the wood framing in the shower stall walls is extremely water damaged. It is obvious there was no way for the insured to know there was a problem until the evidence manifested itself in a visible manner. In this case, the deteriorated wood framing might be covered.
It is important to understand that a home or business property insurance policy is NOT a maintenance policy. It is the insured's responsibility to maintain the property and correct any problems as soon as they become apparent.
We should emphasize once again that you should contact your agent and refer to your policy regarding all questions pertaining to the specific aspects of your insurance coverage.
However, if you take a look at our different
services we can provide you with a very generalized list of common damages that are typically covered by many homeowner and business insurance policies that we handle on a daily basis. This list is by no means complete. Your individual policy may cover more or less.
A Public Adjuster or Independent Adjuster, commonly referred to as a PA, is an employee of a private adjustment firm. As has been stated, an insured has the right to employ the services of any outside party for the purpose of assisting them in presenting their claim. A public adjuster will offer to present a scope of repairs to your insurance company on your behalf. However, the PA will charge you a percentage of the total amount you are paid by your insurance company for their services.
As with some contractors, a PA is also likely to take an adversarial position towards your insurance adjuster and company. Beware of the gloom and doom tactics taken by some PA's. It is possible they may lead you to believe that your insurance company only wants to settle the claim for as little money as possible, and, that if you do not employ their services, you are not going to receive proper compensation for your loss. Our experience in the insurance field simply does not support these contentions.
It is our opinion that, in most cases, the services of a PA are unnecessary and in some cases can actually be detrimental to the settlement of your loss. We strongly urge anyone who is considering employing the services of a public adjuster to make every possible effort to work out any problems they may have with their insurance adjuster before signing a contract with a public adjustment firm.
There are several advantages to using a pre-qualified contractor. The contractor naturally guarantees their work. In addition, your insurance company may stand behind the contractor's work. For example, you incur a loss, file a claim, and your insurance company pays the claim directly to you. You then hire your own contractor to perform the repairs. Now, if the work is not performed correctly or to your satisfaction, basically you are on your own. There is not much your insurance company can do to help you. However, if a company such as Capstone Construction Co., Inc. is involved, you are assured that the work will be performed correctly and to your satisfaction. All aspects of the repairs are handled by the contractor including the procurement of materials, scheduling of all sub-contractors, and overall supervision of the project. All of the details are handled for you.
Many homeowners and/or business owners simply do not know a reputable restoration contractor in their area. If their insurance company does not recommend a contractor, the best an insured can co is to call a company from the telephone yellow pages and check with their local Better Business Bureau. Another possibility is that a friend, neighbor or relative may be able to refer the insured to a contractor. Nonetheless, when a company such as Capstone Construction Co., Inc. is called in by the insurance company, the insured can feel much more at ease with the situation because it is understood that the contractor has a long term working relationship with their insurance company. Details regarding the scope of repairs are worked out primarily between the contractor and the insurance company; with Capstone representing your interests.
In some cases, the contractor is paid directly by the insurance company upon completion of the repairs thereby eliminating the need for the insured to be concerned with disbursement of funds. In most cases, the insured's only financial responsibility for the covered aspect of the loss is the deductible, which is usually paid upon completion of the job.
NO! In the event that you feel uncomfortable with the contractor who has been presented by your insurance carrier, you have the right to select a contractor of your choice to make the repairs to your home or business. However, you should keep in mind that the insurance carrier will not, in most cases, readily pay an amount in excess of that which has been deemed necessary to make the necessary repairs by a contractor that has been pre-qualified.
The insured has the right to utilize, at his expense, the services of any firm to substantiate the amount of his loss. Most policies provide for a remedy in the event that the insured and the adjuster regarding the value of the loss have reached an impasse. This is commonly referred to as the Appraisal Process. The appraisal process is used to determine the proper indemnification for the damages incurred. For additional information regarding the appraisal process we suggest you contact your insurance agent or a qualified attorney.
Your insurance carrier employs your insurance adjuster whether directly or indirectly. It is his responsibility to insure that payments made for the indemnification of your loss are consistent with the terms and conditions of your insurance policy. To that extent, the adjuster is neither on the side of the insurance carrier nor the side of the insured. It is a natural tendency on the part of the insured to believe that proper indemnification of a loss will only result after a long and tedious battle with their insurance adjuster.
Our experience has shown that the majority of the time, the insured is properly compensated for his loss as it can be addressed by the parameters of the policy language. At Capstone Construction Co., Inc. we work very closely with your insurance adjuster and it is our job to justify our estimate of repairs (scope of work) and all associated unit costs. Our goal is to help both the insured and the insurance adjuster settle a claim in an expedient, professional manner. It is our opinion that cooperation with both the insurance company and their adjusters will yield more positive results.
Actual Cash Value (ACV) is the cost of replacing or restoring property at prices prevailing at the time and place of the loss, less depreciation. Depreciation is used to determine the Actual Cash Value of property at the time of the loss. For example, if an item is worth $500 new, is expected to last for 5 years and you have owned the item for 2 1/2 years, then the ACV of that item could be established as 50% of its original value. The amount subtracted from the replacement cost value based upon the percentage of the ACV is typically referred to as Depreciation. Depreciation is a decrease in the value of property over a period of time due to wear and tear or obsolescence.
A deductible is an amount that a policyholder agrees to pay, per claim, toward the total amount of an insured loss. For example, if you incur a loss and your insurance company determines that repairs for the damages are going to cost $5,000.00 and your policy has a $500.00 deductible, your insurance company will pay $4,500.00 and it will be your responsibility to pay the remaining $500.00 balance to your restoration contractor.
Each insurance company’s underwriting department reviews claims and the frequency of claims at the time of policy renewal. These are matters that are subject to the discretion of the underwriting department of your particular company.
The language in most insurance policies requires responsibility on the part of the home or business owner to mitigate his loss. This means that you should take whatever steps are necessary in order to reduce and/or control any additional damage that could occur as a result of the initial loss. For example, if a water pipe in your home should burst and flood your house, you have a responsibility to extract the water from the carpeting as soon as possible. This means you should attempt to perform the extraction yourself or call an Emergency Water Extraction Company such as Capstone Construction Co., Inc..
Your first step is to contact your Insurance Agent or your Insurance Company as soon as possible to report your claim. Their telephone number is typically found in your insurance company policy. When reporting your claim, you should have all the important information ready, such as your policy number. You should also be prepared to provide as much information as possible regarding the nature of the claim and the type of damage involved.
