Insurance Claim for Water Damage
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One of ICC's fully trained public claims adjusters will be happy to help with reviewing and filing your Water damage claim.
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ICC (Insurance Claim Consultants) stands ready to help with all the complexities below and more. We have the resources and experience to make things happen in your favor as you move forward.
Water damage and flood damage are often thought of as the same event or peril. In fact, they can be completely different with one being covered and one excluded under common property insurance policies. Be careful of the terminology you use with your insurance company when you call-in your claim.
Water Damage Insurance Claims
A water disaster can strike anytime, anywhere. Generally, the occurrences are sudden and unexpected and the damages are often very difficult to detect depending on the specific nature of the loss. It has been widely reported in the insurance industry that the most frequent type of loss is from water. Events such as frozen pipe leaks, broken pipes, leaks from appliances, sewage backup, water entering from an opening in roofs, and other elevations of a building due to heavy or driven rain are typical water losses that are covered under most risk property policies. For those who have had no prior experience in handling an insurance claim, the policy language can be very confusing at best. To receive fair compensation for a loss, it is advantageous to have experienced claims advocate like ICC advising you as to the best methods for adjusting such losses. This can be highly technical and impact the way the settlement is determined.
Once a water loss has occurred, the single most important thing you need to do is begin proper emergency mitigation. Removal and dry out should begin immediately. How a water loss is handled in the first 24 hours can be critical in the outcome of your property damage claim. As an example, we often see insurance company adjusters interested in saving money for the carrier neglecting to remove baseboards and other finishings. This prevents air to circulate throughout a building's wall system. Wet carpet needs to be pulled in total or you may be harboring conditions that could lead to further damage or mold conditions. Sticking a blower in an uplifted corner of the carpet will not get the job done because more often than not the padding is soaked and needs to be replaced.
Consider exercising your option to bring in your own water extraction company, restoration specialist, or dry out firm. The carriers preferred vendor is not always the best choice since they may be operating under cost constraints that limit their ability to do the best job. Regardless, it is extremely critical that you DO NOT sign any work authorization forms without an agreement from the insurance company or their representative adjuster to approve the charges. A public adjuster can help guide you through this process.
The next step in determining the extent of the damages involves the use of moisture detectors, hygrometers, and the use of infrared cameras to determine the exact location of the water. If the insurance company adjuster does not follow this protocol, the outcome of the settlement will be greatly impacted, and the complete restoration and dry-out process of the insured property could be in jeopardy.
Additionally, proper disinfectant products need to be applied to prevent any bacteria, fungi, or mildew from causing further damage. If this step is not adhered to, the insurance company’s next approach may be to examine the claim according to the mold provisions and limitations of the subject policy. This is of great concern because mold limitations and coverage are restrictive notwithstanding the complex mold laws, which are vastly different in every state. Please refer to the Mold section of this website for additional details.
You should be aware of something called a Black Water Loss. The handling of this type of loss is completely different and requires special care and treatment. A black water loss results from sewage or other chemical toxins in the water being released in your home or business. Simply drying out this type of moisture is not going to rid your property of these issues. There may be life, health, and safety issues that need to be addressed when cleaning up a black water loss.
Any type of water loss generally takes time for the effects of the water damage to show up. Wood and other types of finishes and furnishings may take days to dry. Often separation and splitting will not start to show up until much later. An experienced pubic adjuster at Tutwiler & Associates will work with you and the restoration company to coordinate the very important issues water losses can present to protect your damage claim.
Finally, because water damage is the most frequent type of insurance loss and thus causes the greatest expense to the insurance company, we are seeing some insurance companies trying to shift this cost to the policyholder even though the policy covers the peril of water. A new trend is putting language in the policy that says any water loss that is reported past a 14 day period will not be covered. If water damage is covered from day one through day thirteen, how does a water loss stop being covered and how do you determine if a water loss is 13 or 17 days old? This is devastating to homeowners, particularly to snowbirds in Florida who are away part of the year or owners away from their property on vacation or for business. Pay attention to this and understand your policy. It is a big deal and could prove to be very costly. Policyholders should be up in arms on this issue and contact their local legislative office and their Office of Insurance Regulation.
After you file the claim, you should hear from the insurance company within a day or two. The insurance company will tell you about its claims process and any responsibilities you have. The company should give you the name of the person who will be working on your claim.
The company must start investigating your claim within 15 days after receiving written notice and may ask you for more information. Once you send the information, the company has 15 business days to accept or reject your claim. If the company says it will pay your claim, it must pay within five business days. If the company rejects your claim, it must explain its reasons in writing.
As part of the process, the company will send an adjuster to your house to look at the damage. It might be a while if there was a disaster and the area isn't deemed safe. Try to be home when the adjuster comes so you can discuss the damage and answer any questions.
The company will tell you in writing if your policy covers the damage and will give you an initial damage estimate. Keep in mind that the estimate may change. The company might provide you with a list of contractors, but you don't have to use someone from the list.
The person you deal with most often during a claim will probably be an adjuster. There are several types of adjusters.
- Company adjusters are full-time employees of the insurance company.
- Independent adjusters are independent contractors who provide claims services to insurance companies. They usually charge the insurance company a fee for each claim they handle.
- Public insurance adjusters are independent adjusters who help people negotiate claims with their insurance companies. Public adjusters work for you, not the insurance company. They charge you a fee for their services. The fee is usually a percentage of the claim and is subtracted from any settlement you get from your company. You don't have to hire a public adjuster.
Settling a Claim
Your insurance company has five business days to send you a check after it says it will pay your claim. If you don't get your check within five business days, call your agent or company. If you think that the company is delaying payment on purpose, call TDI for help.
If you have a replacement cost policy, most companies pay claims with two checks. The company will give you the first check after the adjuster has reviewed your damage. This check will be for the estimated cost of repairs, minus depreciation and your deductible. A deductible is the amount of the claim that you're responsible for paying yourself. Review your policy or ask your agent or adjuster if you don't know how much your deductible is.
The company will give you a second check for the balance of your claim after it receives the contractor's bill for the finished job. You must complete repairs or replace your property within a certain number of days from the date of loss. Review your policy or ask your agent.
Replacement Cost and Actual Cash Value
- Replacement cost is what you would pay to rebuild or repair your home, based on current construction costs. Replacement cost is different from market value and does not include the value of your land. Ask your company if you’re not sure how much it would cost to rebuild your house.
- Actual cash value is what you would pay to rebuild or replace your property minus depreciation. Depreciation is a decrease in value due to wear and tear or age. If your home is destroyed and you only have actual cash value coverage, you might not be able to completely rebuild.
Read your policy carefully to know whether it offers replacement cost coverage or actual cash value coverage.
The insurance company will pay to repair your home with materials of like kind and quality to the original. For example, if the carpet was damaged, the insurance company will pay to replace the damaged carpet with a carpet of a similar grade and quality. If you choose to upgrade the carpet or change the type of flooring, you will have to pay the extra costs yourself.
If You Have a Complaint
If you have a complaint about the way your claim is being handled, first call your insurance company. Many complaints can be resolved by talking to the company about your issue.
If you can't resolve the dispute directly with your company, file a written complaint with TDI. There are two ways to file a complaint. You can use the Online Complaint Portal. You can also fill out a complaint form that is available on the portal page or by calling the Consumer Help Line.
Additional Living Expenses to Relocate
Your insurance company might pay your additional living expenses (ALE) if you have to move from your home while repairs are made. ALE includes temporary housing, food, and other essentials.
Ask your agent or insurance company if your policy includes ALE. If it does, you might be able to get an advance payment to help you move. Most policies pay up to 10 to 20 percent of the amount of dwelling coverage on your house for ALE.
Your insurance company will only pay for additional living expenses up to your policy's ALE dollar limits. Because repairs on your home can sometimes take months, monitor your expenses carefully to make sure you have enough ALE to cover the entire time you’ll be out of your home. If you reach your policy's ALE dollar limits before your home is fully repaired, you’ll have to pay the rest of the expenses out of your own pocket.
Coverage for Mold
Mold can start growing within a day or two after a water leak. Stop the flow of water and dry materials as soon as possible to reduce the chances that mold will grow. Move anything that got wet out of your house to keep more mold from growing.
Most insurance policies will pay to remove mold only if it must be removed to repair or replace the property that was damaged by a covered peril. You must report water damage that was hidden from view within 30 days of the date you first noticed it. Some companies provide a limited amount of mold remediation coverage and other companies will allow you to buy additional coverage for mold remediation by endorsement.
If you're not sure whether you have coverage for mold remediation, ask your agent or the company. Visit the OPIC website to find mold coverage information for most policies.
Any professional who removes mold from homes must be licensed by the Texas Department of State Health Services (DSHS). Property owners may clean up mold on their own property without a license.
Mold assessors and mediators must meet certain qualifications, have required training, and pass a state exam before receiving their licenses.
Certification Required for Certain Types of Claims
If you hire a mold remediator, all repairs and remediation must be inspected. The remediator must also give you a Certificate of Mold Remediation (MDR-1) no later than 10 days after the work is done. The certificate is proof that the mold has been removed and the cause of the mold is fixed.
If you don't have a certificate for the repairs or remediation, an insurance company can deny you coverage in the future based on past mold damage or claims. If you sell your property, the law requires that you provide the buyer with a copy of all certificates you have for that property.
If you repair damage resulting from an appliance-related leak, you need to get a Certificate of Appliance-Related Water Damage Remediation (WDR-1). The certificate verifies that the damage was properly replaced or repaired and that any related physical damage was properly remediated, repaired, or replaced. If you don't have the repairs or remediation certified by a WDR-1, an insurance company can deny you coverage in the future based on previous appliance-related damage or claims.
Protecting Your Home from Future Water Damage
Inspect your home regularly for signs and sources of moisture. After it rains, check for water stains or odors inside your house. Create a maintenance schedule to check the following sources of water leaks regularly and contact a service company with any questions or concerns:
- Water heaters. Water heaters can rust or develop cracks over time. Check your water heater for rust and deterioration every year. Check the drain pan for water and ensure that the drain line for the overflow pan isn’t clogged. Drain and clean the water heater as recommended by the manufacturer.
- Garbage disposal. Routinely check for cracks or leaks.
- A/C drain lines. Damage can occur when the line that drains condensation from the evaporator coils becomes clogged and water overflows from the drip pan. Periodically check the drip pan for water and consider an annual service call to reduce the buildup of algae and mold in the drain line.
- Indoor and outdoor pipes and faucets. Routinely check indoor pipes under cabinets and sinks for leaks, rust, and any signs of deterioration. Minimize the potential for water damage from frozen and broken outdoor pipes by insulating supply lines (in attics, crawlspaces, and exterior walls), protecting exposed outdoor faucets, sealing gaps in exterior walls, and maintaining adequate heat in your home.
- Appliance hoses. Broken hoses are among the most common causes of water damage. Regularly inspect hoses and hose fittings on washing machines, icemakers, and dishwashers for kinks, cracks, bulges, or deterioration. Replace standard rubber washing machine hoses every two to five years or more often if they are showing signs of wear. Consider using steel-reinforced hoses for longer life.
- Showers, tubs, sinks, toilets, windows, and doors. Water leaks around bathtubs, showers, sinks, and toilets can cause damage because the leak is often out of sight. To prevent leaks, make sure you have a watertight seal of caulk around tubs, sinks, toilets, tubs, shower stalls, windows, and doors. Cracks or mold on caulk or tile grout may indicate that you don't have a watertight seal. Remove all caulk or grout, clean and dry the surface thoroughly, and apply fresh caulk. Don't apply new caulk or grout on top of the old materials.
- Attics and ceilings. Routinely check for wet insulation and water stains.
- Wallpaper. Routinely check for bubbling, peeling, and stains.
- Roofs. Keep roofs free of debris that can damage roofing and allow water to seep in. Trim tree branches to prevent them from rubbing and damaging the roof. Repair missing or damaged shingles. Properly seal any cracks around chimneys, skylights, and vents. Check metal flashing for holes, cracks, or other damage. Replace flashing or use silicone caulk to seal any openings.
- Rain gutters and downspouts. Direct rainwater away from your home. Keep gutters clear and make sure downspouts are long enough to carry water away from your foundation. Gutters that are filled with leaves and other debris allow water to back up on the roof, which can result in water damage to eaves and roofing material.
- Sump pumps. Sump pumps are the first line of defense in preventing water from seeping into basements. Periodically check the sump and remove any debris that could clog the pump. Consider installing a battery-powered backup to protect your basement during power outages.
- Weep holes. Weep holes are openings at the foundation level of a brick wall that allow moisture to escape from behind the wall. Don't close or block these openings.
- Landscape. Yards should slope away from the house to prevent puddling near the foundation or under pier and beam houses. Don't allow sprinklers or sprinkler heads to soak the exterior of your house.
- Know the location of water valves. Make sure everyone knows where the main valve is located and how to turn the water off.
- Monitor utility bills. An unusually high water bill could signal a water leak.
- Turn off water before traveling. Turn the water off at the main valve or directly on major appliances. Consider leaving a house key and contact information with a neighbor or trusted friend and ask the person to check the inside and outside of your home periodically while you are away.