Insurance is an integral part of our modern life, and homeowners insurance is one of the most important insurances that have become necessary.
You may not have given much heed to it when choosing insurance for your home. Most of us compare the insurance premium, coverages, and deductibles and then opt for the most suitable for our needs.
We never think of going through the tedious terms and conditions, and we keep paying the premium on time, not even realizing the issues we may face.
The real issue starts when you file a claim. It can be during the filing of a claim against your home insurance.
Claiming against insurance for water damage is even more problematic and challenging primarily because water damage repair can cost a lot of money.
One needs to gain enough knowledge about the tactics of home insurance claim adjusters and even how to scare these adjusters so that they can’t take advantage of the insurance holders.
One also needs insights about how to make a successful water leak insurance claim.
Worry not! This guide will help you understand the process of claiming against water leak damage and also share some tips and suggestions about the entire process and the preventive measures you should take to prevent your property from water damage.
Water damage insurance claims are one of the most widely filed insurance claims. They are the most popular after the claims filed against storms and hurricanes.
Water damage can cause significant property loss; knowing the minute details of the claims process becomes all the more important.
Various reasons can cause water damage and is not always an aftereffect of storms or floods.
N.B. – Most Home Insurance does not cover floods, and a separate flood insurance policy is required to cover your losses from a flood.
There are instances where a room can be flooded from a leaky roof or some old repairs that were not done properly. Frankly, the reasons could be endless.
Although water damage insurance claims are one of the most commonly filed claims, the success rate of accepting the claim is quite low.
Hence, you must check the terms and conditions when signing and understand the coverages under the policy.
Otherwise, if a claim is rejected, the cost of repair or replacement could be substantial.
Now, if you want to learn about how to make a successful water leak insurance claim, do the following:
Before you initiate the process to file a water leak insurance claim, it is important to identify the leak’s source and stop the water inflow.
The reason for doing so is to mitigate further damage, as it would otherwise significantly increase the cost of repair or replacement.
Now, it is also vital to remember that identifying the source and stopping the leak does not mean that you start the full-scale repair process but make some minor adjustments or temporary repairs such as fixing a broken tap or mending a broken pipe, etc.
Another reason you don’t start full-scale repairing before filing a claim is that once you file it, insurance adjusters would visit the affected property and investigate the whole issue asking for pictures and relevant documents to write their report and decide on the claim.
It would be best if you prepared a detailed catalog of all the damages incurred due to the water leak. The restoration team may also document everything to give you estimates.
However, still, it is a good practice to document everything, including taking detailed pictures and videos of the damage and the source.
It will also help you with your claim, as certain things may be covered in your insurance policy.
Objects that have been destroyed or cabinets that have grown mold due to water damage may need to be repaired, cleaned, or even replaced. Documenting them will help you with your claim.
However, it should be noted that if the source of the leak is an appliance, let’s say a freezer or a refrigerator, then usually the surrounding things, such as the cabinets or the wall, will be covered for repair or replacement, but the appliances will not.
So, the insurance will pay for a new or repaired wall or cabinet but will not cover the cost of a new or repaired freezer or a refrigerator.
Water damage is one of the most common causes of property damage in the USA, and it is much higher than the damage caused by fires and storms.
As a result, it is quite common for most homeowners insurance policies to cover water damages. However, there is one caveat: the damage must be sudden or a result of an unexpected event.
These insurances do not cover water leaks or damages from neglect or lack of maintenance.
Homeowners are expected to do regular maintenance and checks to avoid long-term damages.
They should regularly check their air conditioners, water heaters, pipes, and other spaces, such as crawl spaces, vulnerable to water leak damage.
Most homeowners insurance doesn’t cover damage from flooding and needs a separate policy.
A standard homeowners insurance policy covers the following in case of accidental water damage:
However, don’t assume and read through the coverages thoroughly to know how to make a successful water leak insurance claim.
If your property is damaged, you should not hesitate and procrastinate calling the insurance company to file claims for water damage.
Water leak damages are expensive, and waiting can extensively increase the structural damage you may be unaware of and eventually increase the cost of repair or replacement.
According to a report by Fema, mold, and mildew can grow almost in a day or two from the date of exposure. So, the more time you take, the more severe the damage becomes.
It may also reflect negligence if you could have limited the damage by calling the insurance company and taking the necessary steps to stop it.
So, as soon as you know about the leakage and the damage due to the water leakage, contact the insurance company and file the claim.
If you cannot clean the mess yourself, it is advisable to take the help of a professional contractor to clean the damage and carry on the repair or replacement work.
A professional contractor will also give you an estimate which would help you to determine the amount of the claim.
If you have taken the service of an independent insurance agent, contact that person, as it is the agent’s responsibility to help you in this time of need, to smoothen the entire process, and get the appropriate claim value you deserve.
When you are ready to conduct the repair or replacement of the damaged part of the home affected due to water leakage, you must take estimates from multiple vendors.
If you want to master and know how to make a successful water leak insurance claim, then estimates from multiple reputed and licensed vendors would help you determine the type of damage and the project’s cost and increase the chances of your claim being accepted.
It will also help you argue with the loss adjuster if the first settlement value offered is too low.
You can show the independent contractors’ estimates and argue why you rejected the initial settlement offer and asked for a higher settlement value.
Moreover, you can also hire a public adjuster who can estimate the damage’s cost and connect you with contractors for the job who are likely to match his estimates.
Hence, it is paramount that you perform a comparative analysis by talking to multiple vendors and contractors and taking multiple estimates.
Insurance is a highly competitive industry where they don’t care about the welfare of the customers but mostly themselves.
As a result, insurance company adjusters are given higher commissions if they can convince the claimant to accept a lowball offer.
They use scare tactics such as determining the claimant’s liability, pre-existing damage, or poor maintenance to influence the claimant’s decision.
Since most claimants have no clue about the claims process and the minute details about the insurance coverages and the related terms and conditions, they are vulnerable and easy targets for these adjusters.
Hence, hiring a property damage lawyer to fight on your behalf is a great idea if you want to experience a smooth claims process and ensure that you get the maximum settlement value.
They can guide you throughout the process of a homeowners insurance claim and write a rejection letter against a lowball offer and a counteroffer.
They also ensure you are legally protected and get the full value per your policy.
Moreover, the adjusters also avoid playing tricks with customers represented by lawyers. Hence, hire an attorney to protect your interests and get a fair settlement offer.
A water damage and restoration company specializes in repairing and restoring the extensive damages caused by water leaks.
If your property is water-logged and the water needs to be pumped out to avoid further damage and the formation of molds and mildew, then these companies can help you with special suction pumps to drain the water out of your property.
Their professional service also includes aid in cleaning pre-existing molds with special cleaning solutions to restrict further spread.
However, be mindful of the estimates. Don’t believe the first water damage and restoration company you meet. Take estimates from multiple vendors and then decide on the suitable one.
Also, it’s best to leave the other repair work, such as carpentry, walls, or cabinets, to specific experts and not involve the restoration company in that repair work.
They may try to convince you to include that as part of the restoration work but don’t agree to it and sign any contract without comparing it to the estimates given by contractors for those other repair works.
I advise leaving the restoration work to these companies and the carpentry, roof leaks, cabinets, etc., to the specialized contractors for those work.
If the water damage is significant and makes it unhealthy and unlivable, you should prioritize your safety and move elsewhere until it is repaired or restored.
Water damages include molds, leaking walls, and toxic chemicals or wastewater, especially if a flood occurs.
There is also a heightened chance of electrocution in case standing water is on your property, increasing the risk for the house members.
Hence, if you feel it is unsafe to stay at your home until it is repaired, inform your water damage and restoration company of the issues and then move to a hotel and stay there until it becomes safe to stay again.
Most home insurance covers stay in a hotel, including meals, as part of the water damage clause.
To know how to make a successful water leak insurance claim covering the hotel stay and meal costs, you need to read the policy documents properly, inform your lawyer if you have one, calculate the costs, and keep all the receipts to get full reimbursements through a successful insurance claims process.
When you start the water leak claims process with your insurance company, the insurance company will send an adjuster. He will investigate the damage and collect evidence, photos, witness accounts, and anything else to help them assess two things.
Now, it is important to engage with the adjuster as they are exceptional orators and can often persuade you to accept a lowball offer.
They are also looking for opportunities to spill information that you shouldn’t, which they can use against you to significantly reduce the value of the settlement or even reject it.
Hence, never give your opinion or say something that might signal them you are at fault.
They also investigate if the water damage is caused due the negligence of the plumber or due to a faulty appliance,
Suppose they find out that the plumber or the appliance was responsible. In that case, they can subrogate, i.e., pay you the settlement value but recover that from the plumber or the appliance’s insurance company, as they were responsible for the damage.
So, to know how to make a successful water leak insurance claim, you must communicate with your adjuster and keep in touch to get a proper settlement value.
So, you have identified water leak damage and contacted your insurance company. After that, you filed a claim for water damage. Then they sent an adjuster to investigate the damage and decide on the settlement value.
At this juncture, you must understand the difference between replacement cost and Actual Cost Value or ACV in your homeowners policy.
So, replacement cost means that your insurance policy will give whatever your replacement or repair of the damage cost. It usually matches the settlement value sought while filing the claim.
On the other hand, ACV will assess the repair cost after deducting the depreciation value; hence, the final settlement value is less than what is sought.
In some cases, the insurance company would eventually return the depreciation they had subtracted while offering the settlement, but only after you show them actual receipts of the cost incurred for the repair or replacement.
It is done as a security measure so that the claimant uses the money intended for and not anywhere else. In several cases, the claimants took the money and didn’t even use it for the repair.
So, it is vital to document all the costs and collect receipts for all the repair work.
You need to be in constant touch with your insurance company and the adjuster to provide all the necessary docs and evidence of the repair work cost and seek the full settlement value against the water damage claims, irrespective of whether you have an ACV or replacement cost type of coverage.
Filing a claim for water damages and getting a settlement matching the claims is a tough negotiation game and needs continuous intervention by the client to get what they want.
If you are uncomfortable doing all these and don’t have the time and knowledge, the best option is to get an independent insurance agent or a property damage lawyer to fight your case.
Insurance companies are for-profit companies whose goal is to release the least money; as a claimant, it is the opposite.
Hence, you must get professional help if you can’t handle all the hassles to ensure the insurance company offers full settlement value.
Another important aspect to consider is if you want to upgrade a certain section after a water leak damage and not replace it with the same materials used ten years ago.
Now, this degradation may cost much higher than repair or replacement.
Still, you can be truthful with your adjuster via the independent agent or the lawyer that you want to upgrade, and you are ready to pay the difference.
Although your insurance claim may still get rejected, being in constant touch with the adjuster and the insurance company reduces the chances of rejection and increases the chances of acceptance.
Hence, Negotiation is the key!
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The water damage claims are denied mostly for the following reasons:
Gradual damage refers to damage that has been building up over a long time. The homeowners may be unaware of the slow leak, but it kept growing, spreading mold or clogged water.
However, insurance companies always try to find opportunities to deny a claim.
If they determine that the damage in question is gradual water damage, they are likely to reject the insurance claim.
If you have been ignoring the maintenance of your property, such as a leaky roof or a burst pipe, resulting in damage or clogging, it is considered negligence.
Suppose there is a leaky roof, and you have been ignoring the increasing damage, and finally, the roof gave in and damaged other parts of the property.
When you file insurance, it is likely to be rejected as they can find out from their expert adjusters that you have shown negligence by not taking care of your property, and the cost of preparing is your liability.
Flooding can cause burst pipes or other structural damages, and the repair cost could be significant. However, most standard homeowners insurance does not cover it.
You must get a separate flood insurance policy from the NFIP or any other insurance company providing such coverage.
If damage is caused by the sewage system or the septic tank, the repair or replacement costs can be very expensive and usually not covered in a normal home insurance policy. It also poses a significant health hazard.
The policyholder must include additional coverages when taking the insurance policy to cover such damages.
In some states or areas, your insurance policy may not cover water leak damage caused by earth movement. Please review your policy documents properly when taking the insurance or filing a claim.
The best option is to pursue the claim process with the help of an attorney as they are well-versed with the claims process and help you get a fair settlement.
They can help you with the following:
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The most frequently asked questions are as follows:
For a successful claim, you must document everything from the flooded floor to damaged objects. You need to take photographs and videos of the damage and ensure that it was accidental or sudden, not due to negligence or gradual damage.
For any successful claim against water damage, it has to be sudden and accidental. So, for e.g. if a bathtub leak is caused by accident where someone keeps the faucet open by mistake, and the bathtub leaks or overflows and is eventually damaged, it would be covered. Lack of maintenance or negligence would not cover the damage to the bathtub.
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Getting in-depth knowledge about the entire process and following the suggestions mentioned in this write-up is very important to understand how to make a successful water leak insurance claim.
It would help if you also understood how to read the coverages and the vital details of the coverages.
You should also seek help from professional contractors and property damage attorneys to get a fair settlement offer to repair or replace your water-damaged property, be it as small as leaky pipes to as big as a complete renovation.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial advice. The author’s opinions are their own and should not be taken as a recommendation to invest in any particular product or service. It is strongly advised that you consult a financial advisor before making investment decisions. Investing always carries risk, and it is up to each individual to consider their options and make informed choices carefully.
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