All to often claims are submitted to insurance companies, and for one reason or another, they are denied.  Any experienced adjuster has heard countless times from policyholders that we “are paid to deny claims” or perhaps we “have an exclusion for everything.”  This is simply a myth and nothing more than the frustration from someone whose claim may be rightfully denied.  Very few people actually know what is in their policy until they have a claim.  As such, when a claim is denied, it’s not uncommon for the policyholder to just assume that all we do is deny claims.

Auto is simple.  If you get in an accident, even if your fault, or if your car is stolen or vandalized, as long as you have a policy in force and the claim isn’t fraud, you’re going to get paid for your loss.  But homeowners and renters insurance is much different.  There’s all sorts of things that happen to homes that aren’t covered.  The most common denial we see is simply something maintenance related such as a leaking roof.  Very common for a homeowner to call their insurance company about their old roof and “threatening” that we don’t pay to replace their roof it will leak and cause a lot of damage that we’d have to pay for.  We see this a lot with trees that need to be trimmed.  The bottom line is that homeowners insurance is NOT a maintenance policy.  Think about how much you’re already paying for insurance and then think how much more it would cost insurance companies didn’t exclude ordinary wear, tear, deterioration or maintenance.  If we didn’t excluded these types of expected costs, someone could basically not maintain their home and then just expect their insurance company to pay.   Have an old sewer line that needs to be replaced or perhaps the electrical or plumbing in your home is 50 years old and needs and upgrade?  Great… go ahead and get this work done but don’t expect State Farm, Farmers or any carrier for that matter to assist.

Other common exclusions are for damage caused by flood or surface water.  Heavy rains happen and sometimes it’s more than the storm drains can handle.  But when this water then gets inside your house and you have an inch or two of water, that’s unfortunately not covered.  You need flood insurance for damage caused by flood or surface water so don’t get upset if you don’t have flood insurance and then come home to an inch of water throughout your home.

As noted in a prior post, flood and surface water isn’t covered, but plumbing leaks that cause damage may be covered.  But even if we pay for the water damage caused by a broken old pipe, we still won’t pay for the pipe itself.  This is called a “Partial Denial.”  If the pipe failed because it’s simply old (wear and tear), it’s not covered so you’re going to be out your deductible PLUS the cost of the plumbing repair.  Getting old pipes fixed, replacing your roof, repainting your home and replacing old flooring are all some of the joys of home ownership.  So next time your old A/C unit goes out, don’t get upset when your insurance company denies your claim because they are there to protect you against the unexpected.  A 20 year old A/C unit or 15 year old water heater will fail.  It’s not a matter of if, but when.

-Damon

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