Errors and Omissions

[Kaylee13]

What is the name of your state (only U.S. law)? Illinois

Hello,
I live in another state but own a home in Illinois that had been rented until 6 months ago when I placed it on the market for sale.
I have a Business Owner's policy on the home.

The house sold and on closing day we had a disaster, evidently a pipe had burst a week prior and major water damage. This happened on a Friday late and I called insurance and they said secure premises immediatley, gave me claim # etc...So we got Serv Pro out immediately and they began the dry out.
On Tuesday the claims adjustor told me that we had in our policy that if vacant for 60 days there is no valid claim. Because of miscommunication between them telling Serv Pro to go ahead they paid from Friday to Tuesday which was $7000 but we needed another $5000 to finish Serv Pro dry out and prevent mold. Time was crucial so we went ahead and then I filed with Insurance Commission. We just recieved notice saying they cannot regulate this due to it being in the policy.
According to our insurance (don't know if I am allowed to say the name here but it is a big one) they do not even offer this Vacancy Clause and should have told me to find another carrier when the tenants moved and I place home on market. The agent is actaully a friend of mine and is sick about it, he also did not know about the clause.
I understand that I am not covered and there is nothing I can do about that but I talked with an adjustor (friend) who says I might have a legal case against either the agent or agency based on 'errors and omissions'. Basically I did notify the agent that our tenants moved and at that time he should have made me aware that I was not covered?
So I have two questions.
1. Does anyone think I have a case? I have no money to waste but will need the 5k for completing dry out and will need 10k for rehab.
2. At sellling we were breaking even and now house is under water by about 30K, I need to know if there is anything I can do, I can't afford the payments but don't want to ruin my credit. thanks for any and all advice!

 

[tammy8]

What proof did you provide your carrier that the property was vacant and not tenent occupied? When did you provide the insurance of this? What documentation do you have?

 

[justalayman]

this sounds an awful lot like another situation posted here not long ago. Is this for school?

 

[moburkes]

There's a teeny, tiny chance that you'd prevail in court but you'd have to sue the agent and the insurance company. Your policy, as 99% of the do, excludes coverage for vacant properties - for this exact reason, as well as theft and vandalism.

When a property is unoccupied the owner doesn't know when a maintenance issue crops up, and therefore can't mitigate his damage - which ends up costing a LOT of $$$$$$. When a property is unoccupied, it is more susceptible to vandalism as well.

 

[Kaylee13]

error and omissions

Thanks for all your replies.

Tammy, I submitted written proof when the tenants moved out October 2010. House was then on market and sold January, closing was in February.

No, this is not for school, I only wish it were. If it is similar then sorry, but I only found this forum yesterday.

Some additional info: yesterday I called the IL Insurance Commission because when they sent me the 'sorry' letter it said at the bottom that "I might benefit from an appraisal". The only kind of appraisal I had ever heard of was to establish the value of house but she said it was like a mediation and some people have it in their policy and some don't so I looked all thru that mind boggling paperwork and found that I did have it in there. When I read it though I think it is more disputing how much the Insurance company pays not IF they pay. But on there I also saw that if a house is being renovated it is not considered vacant and it was being painted, lots of work done inside and out thru December so I am wondering about this point now as to whether I could get anywhere.??

 

[You Are Guilty]

I think there may be enough here to at least warrant filing a claim with their E&O policy, however, I highly doubt there is a $5k pot of gold at the end of that rainbow. And given the amount at issue, it will probably be uneconomic to retain a lawyer to chase it down. But, it never hurts to ask.

Good luck.

 

[Kaylee13]

Thanks Guilty

I don't want a lawsuit to make anything above what the claim should have been.
I want to finish paying the dry out (Serv Pro) and rehab the house.

As of now the house was selling for 150k and I was only breaking even with my mortgage company.

But now with the house basically a disaster, it really can't be sold unless I rehab it (which I can't afford due to no insurance) or sell it to an investor, I was offered 90k.

So all I want is insurance to pay the claim so I can rehab and sell it at the same price I was originally asking.

but I found out something else yesterday when I called the mortgage company, they said I qualified for a short sale. It had always been my understanding that you must be late on your payments by 2 or 3 months (and I have never been late) but they said these circumstances qualify me and they are sending out a packet for me to get moving on it.

 

[moburkes]

I had written a lengthy post explaining the problem, but it didn't go through.

OP - did you change insurance companies ever during this process? Why did you give your agent written notice that your tenants vacated the property, and what did the notice say?

The specific reason why insurance companies don't cover vacant properties is what happened in your situation. If you're living there and the pip burse, it would have been discovered. If no one is living then when something like that happens, the damage ends up being HUGE!

The other reason is vandalism. Lots of vandalism occurs in empty properties.

I've said it 100 times, and I'll say it again. When I purchased my 1st insurance policy, in my early 20s, I read it from start to finish. I didn't understand it all, but I read it. I wanted to know what I was buying. I wanted to be a good consumer. Other people should do the same.