Does Homeowners Insurance Cover Plumbing and Leaks?

Homeowners insurance protects your house against unexpected losses. Generally, homeowners insurance will cover plumbing and leaks. However, it will not cover certain maintenance-related issues or flooding.

Today, we’re explaining everything you need to know about how homeowners insurance covers plumbing and appliance leaks, including what’s covered, what isn’t covered, and how to maximize your insurance claim.

Most Homeowners Insurance Policies Cover Sudden and Accidental Water Damage

Your home insurance policy should cover damage to your home caused by plumbing issues and appliance leaks, assuming the issue was sudden and accidental.

If your pipes suddenly burst, for example, and water floods your home, then your home insurance policy should cover the cost of repairing this damage, except for the actual pipe that burst, in many cases. It should also cover the cost of gaining access to the pipe and the repairs to replace any drywall, flooring or tile work during that process to get to the burst pipe.

Home insurance is designed to protect policyholders against unexpected damages – like a random burst pipe. It’s not designed to protect policyholders against preventable damages – like mold caused by a cracked pipe dripping behind a wall for five years without being repaired.

How Home Insurance Covers Plumbing Issues and Water Damage

A standard home insurance policy will cover damage caused by plumbing issues or appliance leaks, including any damage to your property and possessions.

A standard home insurance policy includes both dwelling coverage and personal property coverage:

Dwelling Coverage: Dwelling coverage helps pay for damage to the structure of your home. If your home is damaged by a covered peril (like a burst pipe), then dwelling coverage will cover home repairs. It can cover the cost of tearing out and replacing water-damaged drywall, for example, and replacing any water-damaged flooring.

Personal Property Coverage: Personal property coverage compensates you for any possessions damaged during a plumbing issue or appliance leak. If the bathroom above your living room floods, for example, and drips water onto your $2,000 4K TV, then your insurance company should pay to replace your damaged TV, as well as the damaged areas of your home.

Please note that you need to pay your deductible before coverage kicks in. Your insurance policy may also have coverage limits. If your home requires $120,000 of repairs, for example, and your coverage limit is $100,000, then you will have to pay the remaining $20,000 out of pocket.

Home Insurance Won’t Cover Maintenance-Related Plumbing Issues or Long-Term Leaks

Not all plumbing issues and leaks are automatically covered by home insurance.

If your pipes have been leaking for months, for example, and you haven’t taken any action, then your home insurance company may deny your claim. However, some policies do allow for “hidden” damage, but there are usually a set number of days from the date of discovery for you to report that damage, otherwise coverage will be denied.

Or, if your plumbing system is falling apart due to poor maintenance, then your insurer may also deny your claim. As the policyholder, you have a responsibility to maintain your property. If you fail to maintain your property, then your insurer can rightfully deny your claim.

We see something similar for roof damage claims. If your roof was damaged in a recent hailstorm, for example, then you may be able to make a legitimate claim to repair that hail damage. If your roof was damaged in a wind or hailstorm, however, and you refuse to repair it, and then it creates a roof leak causing water damage during the next big rainstorm because of your damaged roof, then your insurer may deny your claim.

Which Plumbing Issues Are Not Covered by Home Insurance?

Depending on your plumbing issue, your home insurance claim could be denied. Some of the most common plumbing issues that are rarely covered by home insurance include:

Damage from Unresolved Maintenance Problems: If your home has a maintenance issue and you refuse to repair it, then your insurance company is not required to cover it. If your kitchen sink has had a continuous leak for years, for example, and you never repaired it, then your claim for mold damage underneath your kitchen countertops may be denied.

The Cost of Repairing or Replacing the Source of the Water Damage: Most home insurance policies cover the damage caused by the plumbing issue but not the actual source of that damage. If your old washing machine caused $10,000 of water damage to your basement, for example, then your insurer may cover the $10,000 of home repairs, although you’ll need to pay to replace your own washing machine.

Water Backups from Outside Sewers or Drains: If your water has backed up from an outside sewer or drain, then your insurance claim may be denied. Standard home insurance policies do not cover damage caused by outside sewers or drains. However, you may be able to purchase additional sewer or water backup coverage.

Flood Damage: Standard home insurance policies never cover flood damage. It doesn’t matter if the flood damage occurred during a hurricane, storm, or other event. Some insurance companies let you purchase additional flood insurance, although many insurance companies do not offer any type of flood insurance. If you live in a flood-prone region, then you may be able to purchase flood insurance through FEMA’s National Flood Insurance Program (which is the only flood insurance option for millions of Americans living in flood-prone areas).

FAQs About Homeowners Insurance, Plumbing, and Leaks

Some of the most common questions we get about homeowners insurance, plumbing, and appliance leaks include:

Do Insurance Companies Cover Broken Pipes? If your pipe suddenly breaks, then your insurance company should cover the cost of repairing any water damage caused by that broken pipe. However, your insurance will not cover the cost of repairing or replacing the actual pipe itself.

What is Gradual Damage? Many insurers will use terms like ‘gradual damage’ when dealing with your water damage insurance claim. Gradual damage occurs slowly over time, causing damage to a property. A leaking pipe that sits unrepaired for months or years, for example, is causing gradual damage to your home.

How Am I Supposed to Know About Damage Behind My Walls? Your insurer may deny your claim because a broken pipe behind your walls was causing gradual damage. How are you supposed to detect issues like this? Ultimately, it’s the responsibility of the homeowner to maintain the property. Take steps to prevent leaks in your home. Check your water bill for unexpected increases. Listen for drips behind your walls. Look for discolorations or other signs of a leak.

Do Insurance Companies Ever Cover Gradual Damage? Most insurance policies exclude plumbing issues and leaks caused by gradual damage. However, every policy is different. Talk to your insurance company to determine if gradual damage is covered. If you believe a claim was denied for no good reason, then consider hiring a public adjuster to assist and maximize your insurance payout.

What Happens If I Discover Additional Water Damage or Mold Months Later? Many homeowners pay to repair water or plumbing damage, only to find additional mold damage on their property months later. In this case, the insurer may agree to cover this new damage even though it’s technically a type of gradual damage. If your home has experienced gradual damage after an initial insurance claim, then you may be able to make a claim.

What About Mold Coverage? Most home insurance policies exclude mold coverage. Mold is a type of gradual damage. If a leak behind your walls is left undetected over a long period of time, then it can cause mold. Unless you have specifically added mold coverage to your home insurance policy, mold is probably not covered.

What Happens if a Tree Falls on My Roof During a Storm and Causes Water Damage? If a tree falls through your roof and creates a roof leak, and then water pours in through the hole in your roof to cause water damage, then you should be able to file a claim for this event under your home insurance policy. Your insurer should cover the cost of repairing the hole in your roof and any water damage that was a result of the damage cause by the tree on your roof. They will also pay for the removal of the tree and any temporary protection you use until an adjuster can inspect the damages. It is your duty to protect your property from further damage until they are able to inspect the home or business.

What is Resulting Damage? You might also see the term ‘resulting damage’ come up during a claim. Resulting damage is different from initial damage. If your old dishwasher explodes and causes water to flood your home, then your insurance company will categorize the water damage as resulting damage. Your insurer will cover this water damage, but the insurer will not cover the cost of replacing your dishwasher.

What to Do If a Water Damage or Plumbing Claim is Denied

Insurance companies have a lot of reasons to deny a water damage insurance claim. What should you do if your claim is denied?

First and most importantly, ask your insurance company for a full explanation. Ask your insurance company exactly why your claim was denied. You have the right to understand exactly which part of your policy excludes your claim. Don’t be afraid to ask for further clarification on certain items – especially if the insurance company is being vague or making assumptions about the cause of the damage.

Second, determine which person actually made the decision to deny your claim – like a contractor, adjuster, or a supervisor. The contractor or adjuster sent by your insurance company might have denied your claim because of perceived pre-existing maintenance issues, for example. A second professional may have a different opinion.

Third, ask an agent or representative for a review or second opinion. Some insurance companies will give you the chance to appeal a contentious claim.

If none of the above steps get you anywhere, or you want help with any part of the process contact a Public Adjuster for help.

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Recommendation: Hire a Public Adjuster To Help Increase Your Plumbing Insurance Claim Payout

Public adjusters are licensed insurance industry professionals with a proven ability to maximize insurance claim payouts.

An experienced public adjuster can turn a denied claim into an approved claim – even when dealing with messy situations like burst pipes and other plumbing issues. A good public adjuster helps navigate the intricacies of an insurance claim to obtain the fair settlement you deserve in order to recover from a loss.

If your insurance company is dragging its feet, denying your claim, or offering a low payout, then it’s in your best interest to hire a public adjuster.

A public adjuster works with the insurance company to settle a claim on your behalf. The adjuster knows the strategies insurance companies use to avoid paying plumbing or leaking pipe insurance claims. A good adjuster also knows how to challenge these claims and turn a denial into an approval.

ClaimsMate makes it easy to hire the best public adjuster for your unique home insurance claim.

A ClaimsMate public adjuster can help you expertly navigate the plumbing damage insurance claim from start to finish, negotiating on your behalf to secure the highest possible payout. Contact ClaimsMate today for a free consultation.

Read More Here: Does Homeowners Insurance Cover Plumbing and Leaks?

Business Interruption Insurance Coverage for COVID-19 Coronavirus: What to Expect

The COVID-19 coronavirus has wreaked havoc on businesses across the United States.

Many businesses expect to receive business interruption coverage with an insurance claim. Insurance companies, however, aren’t sure they are obligated to cover these claims.

Nobody knows what will happen with each specific claim filed. COVID-19 business interruption coverage is going to be a contentious issue. Each unique claim will likely be won or lost in court. Some cases could last years.

Insurers are in unfamiliar territory. They have never dealt with a global pandemic like this. Some insurance contracts have wording specific to global pandemics, while other contracts do not.

Business owners are also confused. They bought business interruption coverage for situations like this. An unexpected event has caused the closure of their business. They expect to receive compensation.

The issue is complicated. It’s also changing daily. We’ve summarized the most up-to-date information on COVID-19 and business interruption coverage below.

Does a Normal Business Insurance Policy Cover Coronavirus?

Does an ordinary policy cover the COVID-19 coronavirus or any other global pandemic?

It’s possible your insurance policy contract will cover coronavirus. It’s also very possible your insurer will argue against covering the claim.

The two most relevant business insurance policy coverages that could apply are Business Interruption and Event Cancellation coverage.

Business Interruption and COVID-19

Business interruption covers loss of profits and increased costs of working. Business interruption coverage is a part of property insurance coverage that can be added to business or commercial policies.

The COVID-19 coronavirus is causing a reduction of income and increase in costs for businesses. Businesses are struggling to cope with containment measures, supply chain disruption, and the mass absence of employees and customers.

However, these factors may not trigger business interruption coverage. Typically, business interruption coverage is triggered by a covered loss – like fire damage.

What Triggers Business Interruption Coverage?

A normal property insurance policy triggers business interruption coverage when covered property damage has occurred.

If your business burns down, for example, or sustains major water damage, then you would receive business interruption coverage while repairs are completed.

This trigger may not apply to today’s circumstances. Your business has not sustained any property damage.

Because of this restriction, policyholders need to examine any business interruption extensions available on their policy. They also need to check for standalone contingent business interruption coverage.

Some policies, for example, have specific infectious disease coverage as an extension, in which case you could be covered for business interruption caused by the COVID-19 coronavirus.

Other policies have extensions regarding suppliers and customers, denial of access, and loss of attraction. Based on the specific wording of these terms, you may or may not receive business interruption coverage for the COVID-19 coronavirus.

Infectious Disease Coverage Does Not Guarantee Coronavirus Coverage

Your business interruption policy might have wording for infectious diseases. However, that doesn’t necessarily mean you’re covered against the COVID-19 coronavirus.

Some policies provide cover for losses caused by any “notifiable” disease. This is an important distinction. Some jurisdictions have declared COVID-19 a notifiable disease, while others have not. The date on which the disease is declared a notifiable disease will also matter.

As pointed out by Fenchurch Law, we first saw the “notifiable” disease issue during the SARs pandemic:

“A decision of the Hong Kong Court of Appeal in the aftermath of the SARS pandemic established that such a clause had the result of reducing the amount of loss covered in two ways. First, losses suffered before the date on which the disease became notifiable were not covered. The decision of a competent authority to make the disease notifiable did not act retrospectively. Secondly, the starting point for establishing the amount of profit lost was the period after the advent of the disease, but before the disease became notifiable, not the period before the first incidence of the disease.”

In other words, your business insurance could cover any losses after the COVID-19 coronavirus became notifiable – but it won’t cover any losses before that date.

The Centers for Disease Control and Prevention (CDC) maintains the National Notifiable Diseases Surveillance System (NNDSS), which lists all notifiable conditions in the country. The list includes anthrax, botulism, cancer, and syphilis, among dozens of other notifiable diseases.

The list also includes severe acute respiratory syndrome-associated coronavirus disease (SARS), which was added to the list in 2003.

COVID-19 became notifiable in England on March 5, 2020. Most other countries declared it a notifiable condition in late February or March 2020.

As of April 12, 2020, the COVID-19 coronavirus is not specifically listed on the CDC’s National Notifiable Conditions database, which could make insurance claims complicated.

Some Policies Exclude Certain Diseases

Some policies have broad coverage for notifiable diseases but have exclusions for certain diseases.
It’s unlikely your insurance policy specifically excludes COVID-19 or coronavirus. However, your policy could include catch-all language like “any mutant variant thereof”.

Some policies have exclusions for “SARS or atypical pneumonia or any mutant variant thereof”, for example, which could mean that COVID-19 is excluded. Atypical pneumonia itself is a form of coronavirus.

Medical professionals could decide this exclusion. When medical professionals categorize or define the COVID-19 virus, they could play a significant role in COVID-19 insurance claims.

How a Hurricane Katrina Hotel Case Could Impact Coronavirus Business Interruption Claims

To fight back against COVID-19 insurance claims, some insurers could reference a business interruption precedent established in 2010.

After Hurricane Katrina in 2005, a hotel company in New Orleans called Orient Express sued its insurance company to recover lost profits via business interruption coverage (Orient-Express Hotels v. Generali).

The insurance company argued that there was “wide area damage” to the region. Because of this wide area damage, the insurer did not have to pay business interruption insurance.

Here’s the idea behind wide area damage: Even if the hotel had been able to continue operating, it would have had no customers because of wide area damage.

Business interruption coronavirus cases will come down to causation. Did the business shutdown due to mandatory orders from a public authority? Would customers have visited the business if the business had stayed open? These questions need to be answered for future COVID-19 business interruption claims.

Event Cancellation Coverage and COVID-19

Some businesses may also make a COVID-19 claim through their event cancellation coverage. Business interruption coverage may be unavailable. Or, it may not be sufficient to cover losses.

In certain industries, it’s possible that event cancellation coverage could cover COVID-19 coronavirus losses.

Event cancellation coverage protects policyholders against losses caused by the cancellation of a specific event as a result of one of a long list of specified perils (or for any cause not specifically excluded).

If event cancellation coverage is triggered, then the insurer is required to compensate the business for any lost profits or increased costs as a result of the cancellation.

What Triggers Event Cancellation Coverage?

Insurance policies approach event cancellation coverage in two ways:

Everything Except Exclusions: The policy excludes certain things from triggering event cancellation coverage, but all other things are covered. This is referred to as All-Risk or Open Perils coverage.

Nothing Except Inclusions: The policy excludes everything except what is specifically listed. Your event cancellation policy is only triggered if a listed event occurs. This is referred to as Named Perils coverage.

Some event cancellation policies will contain specific wording – either an inclusion or exclusion – for cancellations caused by infectious diseases. Policies that contain infectious disease wording may extend coverage to an outbreak on the insured premises or within a specified radius. Some policies also specifically exclude (or include) pandemics.

Some event cancellation policies also refer to notifiable diseases. As mentioned above, your insurance policy may only cover damages after a disease becomes notifiable. Depending on your jurisdiction, the date that COVID-19 became notifiable will vary widely.

Mandatory Versus Voluntary Cancellation

If you file a claim through event cancellation coverage, then your insurer may check if your cancellation was voluntary or mandatory.

Insurers may argue that the cancellation of the event was not “necessary” or “unavoidable”, for example, because you were not specifically directed to cancel the event by a competent authority.

If you cancelled an event because of low ticket sales caused by COVID-19, for example, then you may not receive event cancellation coverage. However, if you cancelled an event because your city banned all gatherings over 10 people until June 30, then you may receive event cancellation coverage.

What Else Do I Need to Know About Business Insurance and COVID-19?

Many other factors could apply to your COVID-19 business insurance claim. Here are some things to consider.

Determining a Cause of Loss

Most business income and business property coverages depend on the cause of loss. A covered cause of loss typically means “direct physical loss” unless otherwise limited or excluded.
Scyld Anderson of Property Casualty 360 believes government-mandated closure is not considered direct physical loss:

“In my opinion, government-mandated closure is not direct physical loss. Furthermore, CP 10 30 excludes losses resulting from the enforcement of any ordinance or law regulating the “use” of any property. It also excludes damage resulting from “delay, loss of use and loss of market.”

However, businesses could argue that the virus has caused direct physical loss in the form of contamination. If the virus is actually present on the property, then there could be direct physical loss. The virus has physically contaminated the property, leading to direct physical loss.

Some policies exclude damages caused by “fungus”, “bacteria” and “wet rot”. These terms should not exclude the COVID-19 coronavirus. However, if the policy excludes “viruses”, then the policy could exclude COVID-19.

COVID-19 Liability Coverage

Many business owners are also concerned about liability coverage. Your liability insurance covers damages that the legally insured becomes obligated to pay as the result of an “occurrence”.

Occurrence is defined as “an accident, including continuous or repeated exposure to substantially the same harmful condition”.

The Supreme Court of Ohio has held that an accident is “unexpected” and “unintended”. Insurers, meanwhile, are not required to pay damages resulting from normal, frequent, or predictable consequences of doing business, or events that businesses can control and manage.

It could be argued that coronavirus infections are the result of “continuous or repeated exposure”. This language was developed for situations like pollution or asbestos, where long-term exposure over time leads to health issues.

Could a grocery store be liable for an employee’s COVID-19 infection because the employee faced continuous or repeated exposure? These questions need to be answered.

Businesses could also face liability for negligent failure to disinfect. Someone might face bodily injury after receiving an infection from the business.

Some policies are endorsed with limitations for damage or injury caused by fungi or bacteria. Some policies have general exclusions for “biological pathogens”.

Other exclusions could also apply to liability cases. There could be exclusions for damage pertaining to impaired property, for example. Impaired property is tangible property that is not physically injured, but that is less useful because the insured failed to fulfill the terms of the contract or agreement.

Final Word: What to Expect from your COVID-19 Business Interruption Claim

Business interruption claims related to the COVID-19 coronavirus are going to get complicated.

Businesses are facing enormous losses from the COVID-19 coronavirus. Some business insurance policies will cover these losses – either through business interruption or event cancellation coverage. Other business insurance policies specifically exclude these losses.

Insurers will argue in favor of limiting their payouts. They will cite rulings from the SARS outbreak, Hurricane Katrina, and other widespread catastrophe situations.

Nobody knows what will happen with all the future COVID-19 coronavirus business interruption claims. Some businesses should receive full coverage, while other businesses may receive nothing.

If your insurer is pushing back against your COVID-19 coronavirus claim, then contacting an experienced insurance attorney might be your best option.

Post Source Here: Business Interruption Insurance Coverage for COVID-19 Coronavirus: What to Expect

Total Loss Insurance Claims: Tips For Dealing with Home or Business Total Loss Insurance Claims

A home or business total loss insurance claim can be extremely challenging.

By successfully navigating a total loss insurance claim, however, you can receive the substantial amount of money owed to you by your insurance company and fully recover.

Today, we’re explaining everything you need to know about a total loss insurance claim for a home or business and what happens if your business or house is a total loss.

What is a Total Loss Insurance Claim?

A total loss insurance claim is an insurance claim where the cost to restore the property to its pre-loss condition is more than its actual value. A total loss fire claim where a fire burns an entire home is a common example of this.

Let’s say a home has an actual cash value of $250,000. This is the value of the home minus any depreciation. A significant amount of the home burns down. It’s going to cost $350,000 to repair this damage. At this point, the home is declared a total loss: it costs more to repair your home than it is worth. In this situation, your insurance company should agree to repay the policy limit on your home insurance policy.

Total loss is common in all types of insurance, including auto, home, and business insurance. Any time repairs or replacements exceed the value of a property, it could be declared a total loss.

Different states have different rules regarding total loss. Some states require repair costs to exceed just 80% of the actual cash value of the property for the property to be declared a total loss. Other states set the limit at 90% or 100%.

Some insurance policies also have different rules for total loss. An extended replacement cost insurance policy, for example, will pay a certain amount over this limit to rebuild your home – say, 20% or more.

How Do Insurance Companies Determine When a Home is a Total Loss?

After an unexpected disaster at a home, you may be wondering: “Is my home a total loss?” First, the insurance company will investigate the claim to ensure it falls under insurance coverage. Then, the insurance company will send estimators to assess the damages. These estimators – such as a general contractor, home insurance adjuster and engineer – will determine how much it will cost to repair and restore everything.

If the estimated cost of repairing or replacing the damaged home exceeds the actual cash value of the home, then the insurance company will declare the home to be a total loss.

Is My Home A Total Loss? Repairing Versus Rebuilding

When investigating your home insurance claim, insurers will also compare the cost of rebuilding your home versus the cost of repairing it.

In many cases, it’s more expensive to repair a home than to rebuild it – even if a large section of the home is undamaged.

Your insurance company will determine how much it costs to repair your home. Then, your insurance company will compare this number to how much it would cost to rebuild your home. If it costs more to repair your home than to replace it, then your home will be replaced.

Don’t Forget About Personal Property Coverage

Most home insurance policies come with Personal Property Coverage. If your possessions are lost in a house fire, for example, then insurance will cover the cost of replacing these items if you have replacement cost coverage, or if you have not purchased the replacement cost coverage for your contents, they will pay the actual cash value of your items, which was the initial cost minus any depreciation for its age and condition.

Your Personal Property Coverage will usually be separate from your Dwelling Coverage. It will be stated on your Declarations Page under Personal Property and it will have a separate value from your Dwelling Coverage.

How Long Does the Total Loss Insurance Claim Process Take?

The total loss insurance claim process can take anywhere from a few days to a few weeks. More complicated claims with back-and-forth negotiations can last months.

Generally, however, it’s in the insurance company’s best interest to close your claim as quickly as possible.

The insurance company’s adjuster may spend several days determining how much it will cost to repair your home. The adjuster will contact superiors to determine whether your home should be declared a total loss.

Once the insurance company reaches a decision, you will be informed. Then, you will receive a check in the mail for either the total loss or the repairs.

How to Make a Total Loss Insurance Claim for a Home or Business

Most total loss insurance claims consist of the following steps:

Step 1) Contact your insurance company as soon as you can safely do so. Your insurance company will tell you how long you have to file a claim, whether the damage is covered under your policy, and any additional steps you need to take.

Step 2) Make temporary repairs. Your insurance company might send an emergency restoration company to your property immediately to start making repairs. While waiting for the restoration company to arrive, make whatever temporary repairs you can safely perform. Put a tarp over the hole in your roof, for example.

Step 3) If you need to relocate, keep all receipts. You may need to move out of your home while it’s being repaired. If so, keep records of all expenses – from gas to meals to hotels. Home insurance policies cover your Additional Living Expenses if you are forced to leave your home after a covered event. This coverage falls under Additional Living Expense and it is usually stated on your Declarations Page with a dollar amount for the limit of liability that insurance will cover.

Step 4) Prepare for visits from the adjuster. Your insurance company will send an adjuster to assess your home damages. The adjuster will determine how much it will cost to repair or replace your home, and how much your possessions are worth.

Step 5) Prepare an inventory for lost possessions. Your adjuster will ask for as much paperwork as possible, including receipts or the approximate value of any lost items. Do not throw out any damaged items until the adjuster has visited. Consider photographing or videotaping any damages to substantiate your claims. The more information you can provide on an inventory, the better. Any electrical items will need a model number and a serial number so that the insurance carrier can check on the value of your contents.

Step 6) Prepare an inventory for home and structure damage. Walk around your home and assess any damages you want covered by insurance. A fire may have mostly affected one side of your house, for example, but the entire roof of your home may be damaged. Or, soot may have spread throughout the entire home. An earthquake or other type of disaster might have left a crack in your walls or swimming pool. There may be problems with your electrical system. Make a note of any damages that were caused and should be covered.

Step 7) Ask for professional inspections on structural damage. Most homeowners aren’t trained to diagnose electrical problems or structural issues with a home. Instead, we recommend relying on the professionals. Ask for a professional inspection on any home damage. Your insurance company may bring in their own professionals such as engineers and you may want to hire your own professionals for help such as a public insurance adjuster.

Step 8) Get written bids from licensed contractors. Each bid should include details of the materials that will be used and their prices on a line-by-line basis.

Step 9) Wait for your insurance company to complete its assessment. Ultimately, you’ll have to wait for your insurance company to return its verdict. The insurance company will determine how much your payout should be and whether your home is going to be repaired or replaced. Then, you’ll work with one of the contractors above to complete the repairs or replacement.

Types of Policies that Affect Total Loss Insurance Claims

Your home or business insurance policy may have certain terms that affect a total loss insurance claim. Notable policy terms include:

Replacement Cost and Actual Cash Value

Replacement cost policies will give you the dollar amount needed to replace a damaged item with an item of a similar kind and quality without deducting for depreciation.

An actual cash value policy will pay the amount you need to replace the item minus depreciation, often leaving you with a large bill that must be paid out of your own pocket.

Let’s say, for example, that a tree crashes into your kitchen during a windstorm, destroying your ten-year old refrigerator. Under a replacement cost policy, the insurance company will pay to replace the old fridge with a new one. With an actual cash value policy, the company will pay less than this amount, because you have used the fridge for ten years and it’s now worth less than it originally had cost.

Extended and Guaranteed Replacement Cost

If your home is damaged beyond repair, then most home insurance policies will pay to replace the home up to the limits of the policy. With an extended replacement cost policy, however, the insurance company agrees to pay a certain percentage over the limit to rebuild your home – say, 20% or higher, depending on your insurer.

Some insurance companies also offer guaranteed replacement cost policies. Under these policies, the insurance company guarantees that it will pay whatever it costs to rebuild your home as it was before the disaster.

Mobile Home, Stated Amount

Total loss insurance claims for mobile homes can be unique. Under a stated amount policy, the maximum amount you can receive if your home is destroyed is the amount you agreed to when the policy was issued. You might buy home insurance for your mobile home with a stated amount of $20,000, for example. That would then be your total payout if the home was completely destroyed.

When to Hire a Public Adjuster for your Total Loss Insurance Claim

Your insurance company assigns its own adjusters to your claim. These adjusters are employees or contractors working on behalf of your insurance company. This adjuster’s goal is to pay you as little for your total loss claim as they are legally allowed to pay.

That’s why many home and business owners choose to hire a public adjuster.

A public adjuster is a licensed insurance professional who works on behalf of you – not the insurance company. Public adjusters charge a pre-disclosed fee of 10% to 20% of the final settlement amount. However, a good public adjuster can increase settlements significantly while also simplifying each aspect and step of the entire claim process to help families with a quick and full recovery after a total loss.

Some of the reasons to hire a public adjuster include:

• The disputed amount between you and your insurance company is more than $10,000
• Your insurance company is dragging its feet, demanding too much paperwork, or otherwise attempting to delay the claim
• Your insurance company has denied your home or business insurance claim
• Your insurer is demanding an excessive amount of paperwork to justify any of your expenses
• Your insurance company has offered a disappointingly low payout for your insurance claim

In all of these situations, it may be in your best interest to hire a public adjuster. Contact ClaimsMate to find a qualified public adjuster who can address your insurance needs.

See Full Article Here: Total Loss Insurance Claims: Tips For Dealing with Home or Business Total Loss Insurance Claims

The Most Common Reasons Why Insurance Claims Are Denied

Billions of dollars of insurance claims are denied in the United States every year.
Insurance companies are for-profit corporations. If there’s a reason to deny your claim, then the insurance company will take advantage of that reason.

Insurance companies will deny your claim because of exclusions in your policy, for example. They might also deny your claim due to suspicion of fraud, non-payment of premiums, or a delay in filing the claim.

Why was your insurance claim denied? Are you worried about your next claim being denied?

We’re sharing the twelve most common reasons why property damage insurance claims are denied in the United States.

1. You Took Too Long to File the Claim

All insurance policies require you to file a claim in a “timely manner”. Some insurance policies have a specific limit: say, 30 to 60 days. Most policies use a general guideline of “timeliness”.
If you take too long to file your claim, your insurer could deny it.

2. You Didn’t Provide Enough Evidence

Insurance companies lose billions to fraud every year. To combat fraud, insurers require evidence. They might demand photos and videos of the damage, for example, or receipts proving the value of certain items.

In most cases, insurance companies are simply conducting due diligence. However, if your insurance company is making excessive demands for evidence, then they could be acting in bad faith. Consider hiring a public adjuster or insurance attorney.

3. You Didn’t Pay your Premiums

If you don’t pay your insurance premiums on time, or if you missed your latest premium payment, then your insurer could deny your claim. Home insurance companies are strict about timely payments.

4. You Didn’t Take Preventive Measures

Your insurance policy requires you to take preventive measures to avoid further damage after a loss. If a storm knocks a tree through your roof, for example, then you can’t simply leave a hole in your roof for a week and expect further damage to be claimed. You need to put a tarp over the roof or take basic steps to safeguard the scene. These “repairs” need to be temporary in nature so that the insurance company can see the actual damage when they arrive.

5. The Damage is Excluded

All insurance policies have exclusions. Most home insurance policies exclude flood damage, for example. Some have more unique exclusions – you can’t claim damage from nuclear fallout, for example.

If your property was damaged from an excluded event, then your claim will likely be denied.

However, insurance companies can also take advantage of policy exclusions. They might argue that the damage occurred due to an excluded event when most damage was not caused by that excluded event, for example. This is where insurance claims can get tricky. If you are dealing with a complicated insurance claim talk to a qualified and licensed public insurance adjuster for help.

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6. The Damage Was Intentional

You can’t intentionally damage your property and expect your insurer to cover it. If your insurance company believes damage was intentional, negligent, or criminal, then your claim will likely be denied.

7. You Failed to Disclose Property Information to your Insurance Company

Insurance is all about risk. Insurers will analyze your home, assess your risk, and charge premiums based on that risk.

Maybe your home has outdated electrical wiring that hasn’t been upgraded since the 1950s. This significantly increases the risk of fire in your home, and your insurer needs to know about this risk.

If you failed to disclose certain information about your property, then your insurer could deny your claim. Make sure your insurer is aware of any underlying problems or risk factors in your property.

8. You Didn’t Tell Your Insurer About Other Property Changes – Like a Rental Unit

Many insurance claims are denied because the homeowner changed something significant about the property. The homeowner may have converted the basement into a rental unit, for example. Rental properties require different insurance than ordinary homes.

Other things that could impact risk include setting up a home daycare, buying a trampoline, renovating the basement or installing a pool. Your insurer needs to know about these changes. If your insurer doesn’t know about these changes, then your claim could be denied.

9. You Gave False Statements to the Insurance Company

You cannot make false statements to your insurance company or your adjuster and expect favorable outcomes. You might have a legitimate claim, but if you make false statements to your insurer about certain aspects of that claim, then it could be denied.

Tell the truth to your insurance company. Every insurance company has significant fraud prevention systems in place. The truth will usually come out eventually. Be sure to see tips for dealing with an insurance adjuster as well.

10. The Damage is Less Than Your Deductible

If your home has $1,500 of damage and your deductible is $2,000, then your claim won't be denied, but you will not receive any payment. This is important as you are still required to make the repairs that were validated by your insurance company, even though the cost was below your deductible. Your policy won't pay you if the deductible is high enough to cover the cost of repairs or replacement, but those repairs must still be made or your next claim could be denied for lack of maintenance to a known issue.

11. Your Policy Has a Cap

Many home insurance policies have a cap for the value of any single item. The insurance company will compensate you up to the cap – but it won’t exceed that cap.

Let’s say your $10,000 engagement ring is stolen. Your home insurance policy has a $5,000 cap or sub-limit for items such as jewelry. Your insurer will compensate you $5,000 for the loss of the engagement ring, but that’s it. You can purchase additional insurance for high dollar items to make sure that you are covered fully in case of a loss.

12. You Failed to Maintain Your Property

You are required to maintain your property and fix certain things. Wear and tear is an expected part of home ownership. Insurance covers unexpected expenses – not expected costs. The claim must be based of off a sudden and accidental occurrence, not an ongoing issue that you failed to correct in a timely manner.

Let’s say your roof is 30 years old. The shingles are falling apart. It needed to be replaced ten years ago. A storm blows parts of the roof off of your home, causing extensive damage to your interior. Your insurer may deny your claim because you failed to properly maintain your roof. The lack of roof maintenance contributed to the loss.

What Can I Do After My Claim is Denied?

Insurance companies rightfully deny thousands of claims every year. However, insurers may also wrongfully deny certain claims.

If your insurer denied your claim or offered too little compensation, then you can fight back.

First, contact your insurance company or insurance agent. Ask why the claim was denied. Ask if there’s anything you can do to fix the claim – like provide more evidence. Or, ask the insurer to review the claim.

The insurance company may have denied or reduced your claim because of any of the issues listed above. If none of these issues occurred, however, and you can prove it, then the insurer may reverse the denial.

In many cases, the insurance company’s decision is final. Your claim has been denied.

If you feel your claim was wrongfully denied, then you can move onto the next step: hiring a public adjuster. These insurance industry professionals represent you against your insurance company. They fight on your behalf for maximum compensation.

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A good public adjuster can increase your insurance payout by up to 270%. In many cases, a public adjuster is the difference between having your claim denied or approved.

Final Tip For Dealing With A Denied Insurance Claim

Insurance companies will take any available reason to deny your claim. Remember: insurance companies are for-profit corporations. They’re concerned about their bottom line – they’re likely not concerned about your household finances.

If an insurance company has denied your claim, consider talking to a public adjuster for help.

Original Post Here: The Most Common Reasons Why Insurance Claims Are Denied

The Anti-Concurrent Causation Clause: Their Effects On Insurance Claims & How It Works

Many homeowners’ insurance policies have an anti-concurrent causation (ACC) clause. This single clause can play a crucial role in the insurance claims process.

For some homeowners, this simple clause has been the difference between a $100,000 payout and a $0 settlement.

Today, we’re explaining everything you need to know about the anti-concurrent causation clause, including how the clause works and what it means when you have an insurance claim.

What is Concurrent Causation?

Concurrent causation is a method of handling losses or damages that occur from more than one cause.

If a windstorm and flood hit your home at the same time and cause damage, for example, then this is concurrent causation: the two events have damaged your property at roughly the same time.

In insurance, concurrent causation occurs when a property experiences a loss from two separate causes. Issues arise when one cause is covered by your insurance policy and the other is not. Your policy may cover windstorm damage but not flood damage, for example.

Depending on your situation, damages from both causes are likely to be covered if your insurance policy has a concurrent causation clause.

Damages will not be covered, however, if you have an anti-concurrent causation clause.

How Does Concurrent Causation Work For Insurance Claims?

A concurrent causation loss occurs when two separate things damaged your property at roughly the same time.

The two events may have occurred simultaneously. Or, they might have occurred one after the other.

Let’s say a tropical storm hits your home. Strong winds damage your roof, while heavy rains cause flooding throughout your neighborhood. Your front door is blown open by the strong winds, and flood waters leak into your home.

In this situation, it may not be possible to separate the damage caused by the flood from the damage caused by the tropical storm. It’s all mixed together.

However, your homeowners’ insurance policy covers damage from wind (like the tropical storm) but excludes damage from flooding.

With a concurrent causation clause, the insurance company will be required to pay damages to the policyholder – even though one type of loss was excluded.

Under anti-concurrent causation, the insurance company would not be required to pay any damages – even though one type of loss was covered.

Concurrent causation traces its history back to California courtrooms in the 1970s and '80s. These courts ruled that claims for damages from concurrent events were valid. If a covered hazard (a windstorm blowing open your door or tearing off your roof) increased the damage from an excluded risk (the flood damage), the entire loss would be claimable by the policyholder.

We’ve seen similar rulings with earthquake insurance claims. Most homeowners’ insurance policies do not cover earthquakes. However, if an earthquake shakes your home, destroys your foundation, and causes a gas line to break and start a fire, then your insurer may be required to cover these damages.

We also hear about anti-concurrent causation clauses every time a hurricane strikes the United States. Many homeowners have had their homes destroyed by hurricane-force winds (which should be covered), but their homes were also damaged by flooding (which is not covered). Because of anti-concurrent causation clauses, homeowners may not receive any compensation for their claims.

What is an Anti-Concurrent Causation Clause?

Today, most homeowners’ insurance policies contain anti-concurrent causation (ACC) provisions.

Anti-concurrent causation provisions arose because insurance companies disagreed with the rulings such as those from California that started in the 1970s and 80s. Insurance companies disliked the idea that they could be liable for more damages. It increased their costs and liabilities.

In response to these rulings in the 1980s, insurance companies gradually started adding anti-concurrent causation clauses to contracts.

The anti-concurrent causation clause excludes damage from covered perils even if a second, covered peril contributed to the damages. The exclusion also applies when two covered events happen at the same time or in a sequence.

Many insurance policies use anti-concurrent causation clauses to limit their liability in certain extreme situations. Many property insurance policies, for example, apply anti-concurrent causation language to specific exclusions like law and ordinance, earth movement, government action, nuclear hazards, utility services, water, flooding, or fungus and mold.

How Do Anti-Concurrent Causation Clauses Work?

An Anti-Concurrent Causation Clause in an insurance policy can have significant impacts when you have an insurance claim for property damage - it can cause an entire claim to be denied for coverage. A typical anti-concurrent causation clause contains language like this:

“The loss will be excluded whether or not any other cause or event contributes concurrently or in any sequence to the loss.”

The anti-concurrent causation clause is typically included as part of a small number of exclusions – including water damage, earthquakes (‘earth movement’), nuclear hazards, and other extreme exclusions.

Many homeowners’ insurance policies are “all-risk” or “open perils” policies, which means direct physical losses are covered unless excluded or limited. The insurance policy may cover all direct physical losses to your home except for losses caused by flooding or earthquakes, for example.

On all-risk policies, an insurance company may use an anti-concurrent causation provision to reduce its liability if you have an insurance claim.

Are Anti-Concurrent Causation Clauses Enforceable in All States?

The vast majority of jurisdictions enforce anti-concurrent causation language in property policies under the basis of freedom of contract: policyholders and insurers have entered a contract, and both parties have agreed to follow the terms of that contract.

ACC clauses have held up in court in some states but not others.

States That Do Not Enforce Anti-Concurrent Causation Clauses

Some states have determined that insurers cannot contract around the jurisdiction’s public policy interest in enforcing the proximate cause rule. Thus, anti-concurrent causation clauses are not valid in all states.

Specifically, four states have ruled that they will not enforce anti-concurrent causation clauses:

• California
• North Dakota
• Washington
• West Virginia

An insurance company may try to argue that it is not liable for damages because of the anti-concurrent causation clause in the policy.

A court may rule, meanwhile, that the covered peril was the proximate or predominant cause of the loss, in which case the damage should be covered.

In most states, the court will side with the insurer based on the principle of freedom of contract. In the four states above, however, courts will not enforce anti-causation clauses.

States that Have Validated ACC Clauses

In most other states, ACC clauses have been validated in court. Here are the states that have specifically validated anti-concurrent causation clauses:

• Alabama
• Alaska
• Arizona
• Colorado
• Indiana
• Louisiana
• Massachusetts
• Michigan
• North Carolina
• New Hampshire
• Nevada
• New Jersey
• New York
• Pennsylvania
• South Carolina
• South Dakota
• Tennessee
• Texas

However, even in states that have validated ACC clauses, there may be some disagreement with how the law is applied.

After Hurricane Katrina in Mississippi, for example, federal and state courts disagreed on how insurance companies would cover damages and deal with ACC provisions.

Federal courts argued that ACC clauses prevent coverage even when a covered peril (like the wind of the hurricane) contributed concurrently or in any sequence to cause the loss by an excluded peril (flooding). Mississippi state courts, meanwhile, found that ACC clauses were inapplicable where an excluded peril (flooding) followed a covered peril (wind damage) and combined to cause an indivisible loss.

Determining the ‘Proximate Cause’ of Your Damage

The best way to fight back against anti-concurrent causation clauses is to argue that the proximate (predominant) cause of your loss should be covered.

If your home is damaged by wind and mold after a storm, for example, then you would argue that most of the damage was caused by wind – not mold.

If the proximate cause of your loss is deemed to be mold – not wind – then your loss will be excluded and your claim will be denied.

If the proximate cause of your loss is deemed to be wind instead of mold, then your loss will be included and your claim should be approved.

For Help With Concurrent Causation Situations, Talk To A Public Adjuster

Anti-concurrent causation clauses are controversial. Insurance companies across the United States have attempted to use anti-concurrent causation clauses to deny coverage on insurance claims.

ACC clauses have been validated in some jurisdictions but not others. Additionally, ACC clauses may be applied in certain situations but not others.

Anti-concurrent causation clause situations can get complicated. If you feel your insurance company has wrongfully denied your claim by applying its ACC clause, or if you’re disappointed in the treatment by your insurance company, then it’s in your best interest to talk to a Public Adjuster.

Contact ClaimsMate today to setup a free consultation with an experienced Public Adjuster that can help in dealing with claims involving anti-concurrent causation clauses.

Originally Published Here: The Anti-Concurrent Causation Clause: Their Effects On Insurance Claims & How It Works