There are two primary reasons your insurance carrier may deny your claim:
- You declined the endorsement, or it wasn’t offered to you.
- Your damage was caused by a chronic/systemic leak regardless of whether you knew about it.
Water damage caused by a sudden event such as a pipe burst, or a storm-damaged roof is typically covered whereas damage caused by a systemic leakage is not unless you have specific coverage by endorsement.
What’s Not Covered?
Examples of losses not typically covered by a property insurance policy might include:
- Overflow/flooding from clogged HVAC systems
- Leaking ducts
- Leaking dishwasher or refrigerator
- Roof or window leaks not caused by storm damage
- Water intrusion through the exterior walls from rising groundwater, poor site drainage, or defective wall claddings
Water damage from flooding is not typically covered by standard property insurance policies. If you are concerned with flooding, you should obtain a policy from the National Flood Insurance Program (NFIP).
Homeowners are expected to maintain their homes with regular inspections, maintenance, and upgrades when needed. The days of waiting for something to fail and then getting the insurance company to replace it are over. Homes require maintenance and replacement of obsolete materials and homeowners should plan/budget for it.
A Change In Law
It’s no secret that Florida has the most legal claims against insurance companies than any other state. In fact, it has tens of thousands more. One famous law firm files hundreds of cases each day! One of the reasons for this was the law which forced insurance companies to pay for attorney fees regardless of the outcome of the lawsuit. Attorneys would take any claim without reservation as they knew either the case would be settled without going to trial and/or they would be paid regardless of the outcome. Don’t we all wish we could get paid for just showing up? Unscrupulous contractors also took advantage of the law by promoting claims against insurers using the Assignment of Benefits clause. Few property owners were willing to pass on a free roof offered by roof salesmen especially when they knew the roof was old and would need to be replaced soon.
The recent passage of Florida Senate Bill 2A enacted four primary measures to curb spurious claims against insurance carriers:
- It reduces the deadline for policyholders to report a claim from 2 years to 1 year for a new or reopened claim, and from 3 years to 18 months for a supplemental claim.
- It repeals the one-way attorney fee provision and makes each party responsible for the payment of their attorney fees.
- Prohibits the assignment, in whole or in part, of any post-loss insurance benefit under any residential or commercial property insurance policy issued on or after January 1, 2023.
- Requires a court finding of breach of contract before a policyholder can sue a property insurance carrier for bad faith based on how the carrier settled the claim.
Attorneys, public insurance adjusters, and contractors who have built their businesses around filing claims against insurance carriers are not happy with the new law. They claim homeowners who cannot afford legal representation will be cheated by insurance carriers. That could certainly happen, but the simple truth is Floridians cannot afford to continue paying attorneys and unscrupulous contractors. Property owners need to accept the responsibility of maintaining their homes and commercial properties. Building materials have normal obsolescence meaning they don’t last forever. Eventually, you will need to replace roof coverings, plumbing, electrical, windows/doors, floor coverings, paint, wall claddings, driveways/walks, irrigation, HVAC, and appliances. You also need to protect the building from insects and termites. There is a defined maintenance cost in owning real property which many fail to acknowledge. Sooner or later, you will have to deal with repair costs.
The Homeowner’s Responsibility
What can Jacksonville area property owners do to avoid denial of latent/systemic insurance claims?
- Conduct regular inspections of your home and document the condition present with date-stamped photographs.
- Perform regular and necessary maintenance on your home.
- Budget for major replacements of HVAC systems, windows, and roof coverings.
- Plan to prep and paint your home every ten years.
- Have the HVAC system serviced twice a year (and keep the receipts).
- Have your home/commercial building inspected by a competent inspector every three years.
Your best defense against a claim denial for water/mold damage is not an attorney, public adjuster, or an overpriced contractor– your best defense is in being able to prove you are a responsible property owner! Your property coverage covers sudden loss, storm damage, or wind-driven rain and if it can be proven these caused your damage rather than systemic material failure, you should be covered. Most importantly, finding material failure before it becomes major damage may negate the need to file a claim at all! Property insurance is there to protect you and your lender against catastrophic losses, and we should all remember that.
If you have water or mold damage, what should you do?
- If there is a pipe leak, turn the water off.
- If there is a small amount of water on the floor, do your best to remove it and dry the floor.
- If there is a large amount of water, you may need a water extraction company. Use them to extract the water from floors/carpets/furnishings, but do not employ any other services they may offer. You don’t know if you need other services yet, even if they are legitimate.
- If the damage appears large and you believe you would need to file an insurance claim, notify your carrier of the problem and get a claim number.
- Call Property360! We’ll determine the cause of the leak, determine what should be done to expeditiously repair the source of the leak, determine the extent of damage, prepare a protocol for repair, and determine if there is mold growth. Repairs are often minimized if we’re contacted upfront which is better for you and your insurance carrier. Remember, at this point, you will not know if this is a covered loss or not. Do not allow a contractor to start demolishing your home/office which could result in an uninsured repair expense to you. Contractors love to demolish drywall, floor coverings, and kitchen cabinets/counters and then charge handsomely to replace them. Often, it is not needed or certainly not to the extent they claim.
Insurance Inspection Experts
Property360 provides residential and commercial building inspections and insurance inspections throughout northeastern Florida including Jacksonville, Ponte Vedra, St. Augustine, Fleming Island, Middleburg, Macclenny, Lake City, Fernandina Beach, and more. We service large properties across the state of Florida. We also provide building inspections specifically to document the condition of the building for insurance purposes and offer our opinions of the origin of water and mold losses. We are qualified as a certified general contractor, mold assessor, pest control operator, home inspector, and building inspector. We’re also level II certified as EIFS/stucco inspectors. Contact us at (904) 606-1570 or request an inspection online today!