Insurance Coverage for Water Damage
We can all learn from problems and mistakes of others. Sometimes those mistakes can be costly. A little bit of knowledge and a little bit of forethought and action, getting things right before events occur can make huge differences.
We went in to help a gentleman recently. He had a home that was for sale,, under contract. Supposed to close within a couple of days and there was a water damage event that happened to be from a freezing pipe. The home was vacant. Putting out a lot of water very quickly and flooded the entire basement. The basement had just been remodeled and re-done recently. Very nice work. Looked great. Other than it was all wet. It had water damage.
As I walked in, he was in a dilemma. He wanted an estimate. I told him, “You don’t need an estimate. This is from freeze damage. It;s going to be covered by your insurance.” He proceeded to tell me and inform me that he had already talked to his insurance and it wasn’t covered. I asked him a few questions as to why and how it is not covered. Water damage from an internal pipe from freeze related source inside the home. How is it not covered?
His agent dropped the ball. Screwed up. Let him down. He placed him with a company that on vacant homes, while they were remodeling the home, getting it ready to flip. To resell. Put a policy on the home that had severe limitations. One of the limitations was it didn’t cover any water damage.
This guy now knows that’s not standard policy. There is all sorts of polices that are available that even if it’s a vacant property, if the property is going to be vacant short term, you don’t have to have a special policy probably. Even if it is, there are plenty of companies that offer full coverage. He unfortunately at the hands of his insurance agent, was placed in a policy that had no coverage for water damage.
Policy probably didn’t cost any less than ones that do offer water damage coverage. And if it did, what was the savings? $10? $20 maybe?
The entire basement was effected. Probably easily $20,000 in damage. It was barely redone. It was beautiful.
Don’t fall into that trap. Most normal home owner policies, water damage from plumbing inside the home should be covered on a normal home owners policy. One time, in over 20 years, I ran into a landlord policy that was so stripped down that it didn’t coverage either. Beware of oddball stripped down coverage. You literally have to go out of your way to find them. They are out there. Do your homework.