Handling difficult water damage insurance claims

Water everywhere and not a drop of coverage is a serious trend.
  1. Please be aware that flood insurance takes 30 days to go into effect.
  2. Mudslide riders may be quicker to add to your current policy.

Mud flow is a very complicated issue, especially when a fire precedes it.    For homeowner’s that would not typically need it, but whose home is at risk due to a wildfire, may have coverage under their regular policy.  The “proximate cause” requires professional guidance. 

United Policyholders explains how coverage can be negotiated, dealing with damage originating from a neighbor’s parcel and how to get your insurer to help pay for mitigation before an event occurs, if there is a risk of loss. This is an explanation basics on mudflow damage/coverageAnd this article was also published after the Montecito floods and has some other resource links. 

  1. If you live near the bottom of a slope or flat area, acquire an additional rider called a  “Back-up of Sewer or Drain Endorsement.”  Risk is especially common when located in flat areas or near the bottom of slopes after major rain events.
  2. If you believe you are at risk for flood or mudslide, you will need FEMA’s NFIP policy which covers up to $250,000 for homeowners and $500,000 for businesses and/or a DIC policy (Difference in Conditions)  NFIP still won’t cover earthquakes, but the DIC will.
  3. If you believe the proximate cause of your loss is due to wildfire, be prepared to lobby your local government and gather scientific evidence.  In the Montecito mudflow disaster, it is very likely most homeowners will be able to prove that the recent wildfires were the “efficient proximate cause” of the mudflow.  Don’t take no for an answer!
  4. If you are at risk of flood or a sewage backup regardless of your insurance policy choices, consider REALLY COOL ideas!  Here’s the interesting link and consider these preparedness tips.
  5. Advocate standardized insurance policies.  Today policies are designed by lawyers for the benefit of their employer (the insurance company), not the policy holder.  This country needs standardized language to even the playing field for millions of homeowners.
  6. Advocate for loser pays all in court.  Like other democratic countries, loser pays all in court.  Close negotiations faster and cheaper.  It discourages frivolous claims.  Otherwise the rich  will continue to game our system.
  7. Advocate for homeowner education.  You put your life savings into your home, but have you been educated before buying about insurance, maintenance and optimizing outcome of a loss?  You should be.
  8. Advocate for disaster resilient housing.  This includes choices in building materials and moveable ADUs.

I applied for a fellowship with the Obama Foundation for this work.  I may not achieve all that I wish for, but I’m willing to make a difference.

We don’t need a president who embarrasses us and distracts.  We need boots on the ground doing important work, as the Obama Foundation clearly recognizes.  He might not be our current president, but he is still leading this country in my mind!

Here’s a real story of how the lawyers once again denied a legitimate claim.

Here’s how an insurance company handled a sewer back up in which the customer PAID for the extra policy endorsement.  The resulting $1.5 million claim in damage was DENIED.

In 2008 a severe rainstorm dropped seven inches of rain over the weekend.  The insured filed a claim and the insurer’s adjuster interviewed the customer and asked if the drains were blocked. Unaware of the later policy implications, the owner answered NO and the adjuster noted it in the claim file, which became the basis for denial.

TipsFromSurvivors suggests you get video evidence of the sewer and drain blockage, or else risk denial of the claim because the insurer may later argue some chain of causation that includes flood…. Read more here.

The insurance company responsible for this claim in this story was the Hartforrd.  TipsFromSurvivors hates this company (and their marketing arm AARRRRP!) so passionately that they are the reason this website exists.  Avoid them please.

Before filing your claim

Be aware that a claim can get off to a bad start if you report it using “hot button” words like “mold” or “flood.”

Those words may sound harmless to you – but insurance representatives today are trained to think “excluded” when they hear them, and they may not accurately describe the cause of your damage or loss.  You’re better off explaining that your property has been damaged in a SUDDEN AND ACCIDENTAL event.

  1. Be aware that asking about a POTENTIAL claim can also affect rates — even if the claim is never filed.
  2. Read your policy.
  3. Make arrangements to have the damage thoroughly inspected by a qualified professional. (Photograph and video the damage and source, if possible)
  4. Do NOT answer any questions from insurer until you understand the situation.
  5. If you need help understanding your situation, consult an experienced policy holder lawyer or use United Policyholders “Ask an Expert” forum.

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No story is told if there is no lesson.
Be informed. Choose wisely.

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