Insurance Coverage, friend or foe?
After the “rain event” in Toronto on July 8th, 2013 the number of people in Toronto affected by the flash flooding is staggering. Even after 2 weeks, there are many people still dealing with significant water damage issues and the accompanying mold problem. We have had many discussions with customers who have had a similar and unfortunate response from their home insurance companies, “your claim is denied”.
For the most part, 80% of the customers we have talked to have been denied or provided with inadequate coverage by their insurance companies. The reasons have varied significantly, some of the highlights being;
- Pre-existing issue (ie. Cracks in foundation)
- Considered a maintenance issue and therefore not covered
- Policy did not have additional rider for sewer back up/sump pump
- Policy guidelines changed and no longer covered due to changes in policy conditions
- Coverage is only up to X dollars, which in most cases doesn’t cover even a fraction of the costs
- Repairs are covered but the client is forced to use the insurance companies contractors (who may or may not provide quality services who may instead by the lowest cost provider)
- Claim is covered at a capped rate of $15-$35 per hour (which leaves the consumer to pay the difference – which is usually a much hire hourly rate for a skilled tradesperson)
In the end, most consumers are feeling as though their insurance company has simply not been there to support them in their time of need. And the lingering question is, what could I have done to protect myself.
Below are a list of recommendations which may help you in the future but sadly this information is of little value to those who are currently looking for some relief from your insurance company.
- Read your policy carefully, and review it EVERY YEAR as insurance companies routinely make changes or apply specific conditions that will change your coverage – You may not be covered for what you think you are
- Typically, standard home owner insurance policies do not cover water damage as it’s considered “maintenance”, check your policy and talk to your insurance provider about what is covered and what options are available to you – and provide SPECIFIC examples to get a clear picture of what is and is not covered (and at what price)
- Ask if you have sewer back up and sump pump coverage – and be sure to find out if there are specific guidelines that you need to adhere to in order for the coverage to be valid
- Ask if there are any “caps” to the coverage and understand the nature of any limitations that exist
- Find out what options you have to determine who performs the work –while the insurance company may be paying for the repairs you should have the right to ensure that the person(s) performing the work have the proper qualifications
Water damage is one of many “delicate” area’s of coverage. It really is important for you to educate yourself of the specifics of your policy.