Homeowners Insurance Denied

[Falcon99usa]

California.
Exactly a year ago (the night of February 3, 2002 Sunday) I discovered a water damage in my house, which was caused by faulty water heater (leak) in garage. The water got into the bedroom and partially also into next room. I contacted my insurance right away (Monday morning at 8:00am), and after several phone messages to insurance co. finally after 2 weeks they sent claim inspector to check the damage. He confirmed water damage and also discovered small mold in garage next to water heater and in bedroom's closet, and adviced me that I may not get claim paid by insurance because of mold. About 3 months later my claim was denied by insurance, because they claim is was my negligence and lack of maintenance. I contacted California Insurance department, and after their investigation, they sent me a letter stated that they cannot judge the merits of each party's position, and that a court of law can listen to testimony and weigh the facts each side presents. Basically I have no choice, but to sue insurance.
Of course the water leak was probably for some time unnoticed, since I was living in the 4 bedroom, living room, dining room and family room, with 3 car garage by myself (during separation), and this way I did not occupied all the areas of huge house, especially downstairs where the damaged was only to one bedroom, closet and corner of next room.
My position is that isurance company should cover the water heater damage, but they don't want to pay for anything.
I understand that I have to pay for the water heater and installation (not covered by insurance policy), which I did about $500 total (labor and material), and I am not seeking reimbursement for that. I also paid for the small mold cleanup, which was minimal, just bleach out, I paid $50 too.
The big portion was fixing garage drywall around water heater, new insulation, plastering, texture and painting, plus new carpet and pad in bedroom and the room next to it, including base mouldings installation and painting the walls, which was total $4,000. I filed a small claim against insurance on January 31, 2003 (just before SOL) for only $4,200, just adding $200 for the small table damage and some of the items stored on floor in beedroom closet. What is your opinion? Please help...Thanks you!

 

[I AM ALWAYS LIABLE]

California.
Exactly a year ago (the night of February 3, 2002 Sunday) I discovered a water damage in my house, which was caused by faulty water heater (leak) in garage. The water got into the bedroom and partially also into next room. I contacted my insurance right away (Monday morning at 8:00am), and after several phone messages to insurance co. finally after 2 weeks they sent claim inspector to check the damage. He confirmed water damage and also discovered small mold in garage next to water heater and in bedroom's closet, and adviced me that I may not get claim paid by insurance because of mold. About 3 months later my claim was denied by insurance, because they claim is was my negligence and lack of maintenance. I contacted California Insurance department, and after their investigation, they sent me a letter stated that they cannot judge the merits of each party's position, and that a court of law can listen to testimony and weigh the facts each side presents. Basically I have no choice, but to sue insurance.
Of course the water leak was probably for some time unnoticed, since I was living in the 4 bedroom, living room, dining room and family room, with 3 car garage by myself (during separation), and this way I did not occupied all the areas of huge house, especially downstairs where the damaged was only to one bedroom, closet and corner of next room.
My position is that isurance company should cover the water heater damage, but they don't want to pay for anything.
I undestand that I have to pay for the water heater and installation (not covered by insurance policy), which I did about $500 total (labor and material), and I am not seeking reimbursement for that. I also paid for the small mold cleanup, which was minimal, just bleach out, I paid $50 too.
The big portion was fixing garage drywall around water heater, new insulation, plastering, texture and painting, plus new carpet and pad in bedroom and the room next to it, including base mouldings installation and painting the walls, which was total $4,000. I filed a small claim against insurance on January 31, 2003 (just before SOL) for only $4,200, just adding $200 for the small table damage and some of the items stored on floor in beedroom closet. What is your opinion? Please help...Thanks you!

======================================

My response:

Your case is a loser.

First, the "statute of limitations" for property damage in California is 3 years - - not 1 year (that was the former personal injury "statute"). So, you rushed to the courthouse, worrying, for nothing.

Second, and the real reason your case is worthless, is because all California insurance policies state that the insurance company will pay for "immediate" pipe or water bursts.

Yours was a "maintenance" problem that became worse and worse (because you failed to inspect your premises for problems) and, over time, the little leak got bigger and bigger until finally, it got so big that it leaked all over the place.

The reason is simple. In an "immediate burst", mold does not have time to grow. Mold is an indicator that this didn't happen immediately.

Also, read your policy - - it's in there (and I believe the insurance company has already pointed out the policy provision to you in their denial letter). It goes something like this - -

"This insurance does not apply:

". . . (f) to bodily injury or property damage arising out of the discharge, dispersal, release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste materials or other irritants, contaminants or pollutants into or upon land, the atmosphere or any watercourse or body of water; but this exclusion does not apply if such discharge, dispersal, release or escape is sudden and accidental."

The phrase "sudden and accidental" is unambiguous and therefore must be interpreted as a lay person would understand it: "'(A)ccidental' conveys the sense of an unexpected event, while 'sudden' conveys the sense of an unexpected event that is abrupt or immediate in nature." [Shell Oil Co. v. Winterthur Swiss Ins. Co. (1993) 12 Cal.App.4th 715, 755, 15 Cal.Rptr.2d 815, 841]

Sorry, but you're going to lose this one.

IAAL

 

[Falcon99usa]

Thanks for quick answer IAAL

Thanks for your quick answer, but I wiil still sue, and I will let you know in March who won! By the way, I can't find in my policy anything saying about "immediate burst", but opposite. The insurance cover the accidental discharge or overflow of water or steam from within plumbing, heating, air conditioning or automatic fire protective sprinkler system or from within a household appliance. (insurance is not covering the system itself from which the water or steam escaped).
I disagree with you, because the small mold is only the result of initial water damage!!! If the escaped water damaged your carpet, pad, drywall, you think the insurance company is out of the hook, because the water was under carpet unnoticed for some time, I think it's wrong. I am not asking them to pay for the mold, but for water damage!!!!!
I understand their policies are written clever to avoid any loses to be paid, but we will see....!
Thanks again.

 

[I AM ALWAYS LIABLE]

Re: Thanks for quick answer IAAL

Thanks for your quick answer, but I wiil still sue, and I will let you know in March who won! By the way, I can't find in my policy anything saying about "immediate burst", but opposite. The insurance cover the accidental discharge or overflow of water or steam from within plumbing, heating, air conditioning or automatic fire protective sprinkler system or from within a household appliance. (insurance is not covering the system itself from which the water or steam escaped).
I disagree with you, because the small mold is only the result of initial water damage!!! If the escaped water damaged your carpet, pad, drywall, you think the insurance company is out of the hook, because the water was under carpet unnoticed for some time, I think it's wrong. I am not asking them to pay for the mold, but for water damage!!!!!
I understand their policies are written clever to avoid any loses to be paid, but we will see....!
Thanks again.

My response:

Okay. I'm looking forward to the conclusion also. Post when decision is made.

IAAL

 

[HomeGuru]

Here is my opinion. The water damage was caused by lack of repair and maintenance of the water heater appliance or appurtenant piping most likely due to rust and corosion. Most water heaters, especially older ones, tend to develop rust and corosion at the base of the heater and that is where the leak (small pinhole type) probably occurred. If the leak is not addressed, over the course of time, the hole becomes bigger and bigger due to the combination of the rust and the hot water pressure in the tank.
Some questions the insurance company attorney may ask:
When did you last inspect the water heater?
What was the age and condition of the water heater?
Was the leak and failure of the appliance due to rust and corosion that would have been easily observed during the course of a general visual non-destructive inspection?
Did you conduct proper and routine maintenance of the water heater as directed by the water heater manufacturer's installation specifications and owner's manual?
Did you read the exclusions in your homeowners insurance policy?
Etc.

There could be conditions that may be sudden and accidental such as a leaking shut off valve, inlet plumbing connections, defective TPR valve etc. that the insurance company may or may not cover.

 

[blau]

I once had a main sewer break cause a blockage and cause overflowing

I once had a main sewer break cause a blockage and cause overflowing in the house.

They tried to deny paying by said that the swer break casuing blockage was not an immediate burst.

I argue that there are not such thing as a immediate burst or imediate failure. As a engineer I argue all vessel failure (heater tanks, pipes) take time to fail even if it takes micro to fail. Even a over pressured boiler could take seconds or minutes to completely fail. Just picture it. First you will have a small leak at the seams then a few seconds later perhaps the bolts started to "shoot" out and finally rupture. According to the defination of immediate burst, they would not even have to pay for that too. If this is ture the term immediate burst could be use to deny all claims.

I think the bottom line is that they are claiming that you did not do proper maintance. But, a water heater is suppose to be maintance free.

ALSO, the inspector did not come to inspect your problem for 2 weeks after the accident. According to the FDA molds and mildew could develop in 48 hours. So if they come in two weeks the mold or mildew could have developed by then.

I think the insurance companies are rediculious. What are they going to use to denie claims next. Would they deny payment if your breaks fail and crash into another can if you cannot prove that you had inspected the breaks before in a reasonable time. And if you provide proff of the inspection then they could counter claim against the person who inspected your breaks saying they did not do a good job.

In my case they paid me. The pay for the damage and repair for the sewer lines. The tried to claim depreciation on the sewer lines by 20% too. And I argue that sewer lines don't depreciate they have an indefinate line. If for example I were to sell a house I can't get more money if they are reproted new. If it is not working then the house will be worth less by the amount of the repair.

I hope this helps. They may get away with it but I would not just let it go not for $4,000.

blau

 

[Falcon99usa]

Thank you!

Thanks for you input. I will prepare myself very well for the court, and I will have a lot of question for the insurance rep. Certainly I would want from him (her) proof, how it happened (the water heater accident). Was he (she) seating in my garage when it happened and he saw it? Can he say for sure it was over the week time or it happened over the few hours or minutes? One of the excluded item they do not cover for damage is smoke, like mold. So it means that if I had fire in my house and smoke damage that the insurance company would not pay the claim because of smoke? Definitely their 20 pages plus written insurance policy is designed to avoid as many loses as possible, so they don't have to pay claims.
I am glad you pointed out about mold and mildew build up in 48 hours, and also maintenance free. The only thing you have to do with WH is release pressure through valve at least once a year. My argument is gonna be that I can not be seating and observing water heater 24 hours, and once the water escaped the heater (doesn't matter if in a few minutes, hours or a few days), the damage is done to drywall, inside the wall insulation, carpet and pad, even when you would try to dry out all the mentioned in a next day, needless to say how you would get rid of corroded water stains. No matter how good system you will have, the insurance company can not guarantee me that inside the once soaked walls and under the carpet or pad over some short time later there would not be developed health hazardous mold and mildew!!!!!!!!!!!!!! The only way to get rid of mold is then replace the damaged drywall and insulation, maybe bleach out the less effected walls, and definitely change carpet and pad.
So put it in reality, once the water is out, the damage is done, and the replacement has to be done, unless the "smart" insurance will garantee my in writing that I will not have future hazardous condition resulted from mold and mildew.
Insurance can't give me this guarantee, so they better reimburse me for the repairs. I will fight my case all the way up, if I have to.
If I would not pay the premium, they will cancel my policy immediately, but if they don't want to pay for the claim, I can't cancel them, I have to fight for my rights!!!
Thanks again.

 

[Falcon99usa]

I won!!!

I promised to let you know (IAAL) when decision is made, and I would like also thank you all for you guys (HomeGuru, blau, IAAL) help and input.
I had my court date in March, but my insurance company did not show up, and the case was postponed. Lately I found out, they were late for the court. Anyway, the next court date I was prepared and presented all evidence to the judge, similarly the insurance side, and judge said he will decide in a few days. It looked I may loose my case, like IAAL stated earlier: "Your case is a loser", but...after some time I received the judgment for $4,230 and insurance company paid the amount including $30 small claim filing fee. My loss was about $500 for a new water heater and installation, which was not covered by insurance company.
I am happy I got reinbursement for the contractor work, and I just recieved a new renewal from my insurance for the next year. Their rate went up only $5, and because I am satisfied customer since 1996 (also have insured vehicle with Wawanesa) I will stay with Wawanesa Insurance in the future.
Thanks again and good luck all of you.
P.S. You don't need to be a lawyer or expert to win your case.
Falcon

 

[I AM ALWAYS LIABLE]

My response:

Congratulations!

Please, if you can, paraphrase the judge's reasoning for finding in your favor.

IAAL