Posted: Mon Nov 05, 2007 1:31 pm Post subject: Homeowners' Insurance - Water Leaks May Not Be Covered
I have a rather unusual situation with a client and a well-known preferred home insurance carrier. What do you think?
One day the insured came home and for whatever reason he leaned against the bathroom wall and it suddenly collapsed.
The sheetrock was soaked and so was the insulation inside the wall and mold and mildew was everywhere. There was a small pin-hole leak in a water pipe that obviously had been leaking for quite some time.
The insured called the insurance company to report the incident, a claim was filed and an adjustor came to look at the damage.
The claim was denied by the insurance company because the standard HO-3 homeowners' policy specifically "Excludes" a loss as the result of a water leak over an extended period of time.
If this had been a sudden erruption of a water line, a leaking dishwasher, or a leaking fill line to the ice-maker, it would have been covered. Because this leak had been "over an extended period of time" it was not covered.
So, are we to lean against all of our walls everyday just to see if we might have a water leak? _________________
Alright... I'm suppose to handle property losses now but I have to admit... I'm not a "property adjuster".
I'm looking over an ISO HO-3 and I found the exclusion for "Constant or repeated seepage or leakage of water..." but it goes on to say "...unless such seepage or leakage of water or the presence of condensation... is hidden within walls or ceiling or beneath the floors of above the ceilings of structure". If your carrier removes that exception from the ISO form, I'd write with another carrier. Perhaps the adjuster does not know that this exception might exist in their policy.
Posted: Tue Nov 06, 2007 9:08 am Post subject: Ho3 excludes leaking pipes....
The typical HO3 policy doesn't cover water damages caused by leakage of pipes. Water seepage is considered to be a maintenance issue and the homeowner is responsible for monitoring and fixing any leakage (if detected). Therefore, the adjuster is right in that way. If his policy excludes any damages caused by the leaking pipes then he may not receive any compensation for that. _________________ Register Now to have your Insurance queries solved.
So, are we to lean against all of our walls everyday just to see if we might have a water leak?
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Well, it seems so.
These policy verbiages are often tricky. Therefore, it always becomes necessary to acquaint yourself thoroughly with the policy document.
Tcope, very useful information. Thanks buddy, it has cleared some clouds of doubts from my mind also. _________________ Register Now to have your Insurance queries solved.
I handled HO (along with other types) claims for ten years, and they are tricky, ''give the peril here, take it away there''....OP check your policy to see if it ''gives'' the peril back per tcopes post....Which makes sense, if you cannot see (or hear) it, how do you know it happened? when I was handling these losses (87-97), these types of claims were ALWAYS denied, they did not meet the criteral of 'sudden and accidental' and did meet the (denying) critera of , ''slow deterioration". I would caution the homeowner though, even back then when I was handling these, folks would read the policy and say, 'it DID happen suddenly) but then of course upon inspection would clearly see that the faucet had been leaking for years (rust) or mold around the edge of the tub, in this case, maybe could've noticed the wall was saggy or wet? I don't know I'm just saying that is something to think about....
But many things change in ten years! (MAN I'M GETTING OLD! ) Check the policy wording.
Posted: Tue Nov 06, 2007 4:04 pm Post subject: Homeowner's Insurance
Here is the exact HO-3 wording:
"We Do Not Cover:
Continuous or repeated seepage or leakage of water or steam over a period of time, weeks, months or years, from within a plumbing, drainage, heating, air conditioner system or automatic fire protective sprinkler system or from within a household appliance."
I guess the key words here are either "suddenly" or "over a period of time". If the water line had just suddenly bursted and blew out the wall, there would have been no problem.
Most people who buy homeowner's insurance and intentionally request an "all perils" policy would think that a water leak inside a wall would be covered, but they had better read their policy. _________________
... and it may be the case that the policy I quoted had the 2nd part added to the standard ISO form. Our policies are said be more expensive then most and it's probablyt because the cover a _little_ more then others. Though, I'm not saying this is a good thing. Many people would rather pay a lot less for a _little_ less coverage. In this case it migth have paid for itself but this is probably not typical.
I thought someone mentioned damage caused by the homeowner being covered but don't see that now (sorry if I missed it)... but from 15 years ago taking loss reports I rememeber people having leaks in their slabs. From what I remember the cost to _repair_ the pipe was not covered (maintance) but the _resulting damage_ was (sudden and accidental). Maybe not related but going over to an auto... if an alternator fails and catches on fire, the alternator is not covered (mechanical) but the resulting fire damage is covered. Is this perhaps not at least the same premiss? I'd think the HO-3 policy would not cover the pipe damage but would cover the resulting water damage. I'd think the "sudden" clause would have been met for the damage surrounding the pipe because as soon as the pipe started to leak, the water damage was done. Did the _water_ damage really get worse over time? I doubt it. Keep in mind I'm not talking about any mold damage... but is mold ever "sudden"? I've not read the policy but I have no doubt it addresses mold _specifically_ but seperately then water damage.
) Check the policy wording.
