A seemingly minor leak can leave you with an expensive home repair headache. On average, water damage repairs cost between $2,000 and $6,000, but restoration after severe damage can run upward of $100,000.
Paying for repairs upfront is difficult, if not impossible, for many homeowners. Insurance plays a critical role in decreasing your out-of-pocket costs so you can complete the work your home needs.
Unfortunately, insurance companies often deny water damage claims, leaving homeowners to foot the bill on their own, but having the correct information can go a long way in preventing these denials. As a homeowner with water damage in Cincinnati or Northern Kentucky, Lawrence & Associates Accident and Injury Lawyers, LLC is committed to helping you understand why your water damage claim may be denied and what to do in response.
Understanding Water Damage in Homeowners Insurance
Water damage is one of the most common types of home damage, with around one in 60 insured homes submitting a claim related to water or freezing every year. Insurance companies typically only pay a fraction of these claims, and they make their determinations based on the cause of the loss. More specifically, insurers use two classifications when deciding whether or not to cover your claim:
- Gradual water damage occurs over time and is usually preventable.
- Sudden damage occurs abruptly, such as when a pipe bursts or an appliance breaks.
Most insurers cover a property damage insurance claim for sudden water damage but deny claims resulting from gradual damage. Reviewing your specific policy language is crucial because it outlines the scenarios it covers.
Primary Reasons Water Damage Claims Are Denied
Insurance companies typically approve claims when water damage results from an unexpected accident or equipment failure. However, they will deny claims for various reasons, many of which can be avoided through routine maintenance and inspections.
Gradual Damage and Long-Term Leaks
One primary reason insurance companies deny water damage claims is that the damage occurred gradually over time, rather than suddenly during a leak. Insurers generally consider slow leaks and chronic seepage as a maintenance issue. As a result, they hold the homeowner responsible for addressing the problem before it causes damage.
Lack of Maintenance
Insurers frequently deny claims when the damage resulted from a lack of proper maintenance. They expect homeowners to regularly inspect and repair areas of the home where water leaks might occur, including:
- Old plumbing, which may become corroded or cracked
- Unaddressed roof leaks
- Clogged gutters, which can lead to ice dams
- Damaged caulking around showers, bathtubs, and toilet bases
- Leaking appliances, such as refrigerators or dishwashers
Document any inspections you perform so you can provide evidence of your home maintenance to the insurance company if you have to file a claim.
Flood Damage
Homeowners sometimes assume insurance will approve any claim resulting from weather or a natural disaster. This is typically the case with claims for tornado, hail, and fire damage.
However, standard insurance doesn’t cover flood damage resulting from water rising outside the home. Separate flood insurance through the National Flood Insurance Program, or NFIP, is necessary to cover direct losses from flooding.
Sump Pump Failure or Water Backup
If property damage occurs because your sump pump fails, your insurer may deny your claim because they regard it as a preventable issue rather than a sudden event. Similarly, your insurance company may deny a claim for a sewer or drain backup because, as a homeowner, you are responsible for maintaining these systems.
Coverage for these kinds of problems may require you to purchase a specific endorsement or rider.
Groundwater Seepage
Groundwater seepage—where water slowly enters your home through small gaps or cracks—is another common exclusion from homeowners insurance. This seepage occurs gradually, typically through the basement or foundation. It can occur due to inadequate drainage as well as heavy rainfall or melting snow.
Mold, Fungus, or Wet Rot
Some homeowners insurance policies offer limited coverage for mold if it occurs due to accidental damage. For example, if your water heater bursts and mold develops before repairs are completed, your insurance policy may cover the treatment and removal of mold. However, most policies exclude long-term or preventable mold growth, fungus, and wet rot, which can occur due to groundwater seepage, damaged pipes, and roof leaks.
Faulty Construction or Repairs
Flawed construction and plumbing are also issues insurers expect homeowners to identify and fix during inspections and maintenance. Failing to do so falls under their definition of negligence, so they won’t cover any resulting damage. Additionally, insurance companies often deny claims if substandard repairs are found to have caused the water damage.
Vacancy
When examining your homeowners insurance policy, look closely for a vacancy clause. In most cases, insurers consider a home vacant if it’s unoccupied and doesn’t contain any personal belongings.
Most policies exclude coverage if a house is vacant for a specific period, typically 30 to 60 days. These homes are at a higher risk of damage because no one is present to monitor for leaks.
Failure To Mitigate Damages
When you discover water leaking into your home, you must take immediate action to prevent or minimize damage. If you don’t take reasonable steps to stop the water source, an insurance company may deny all or part of your claim.
For example, if you realize your dishwasher is leaking but continue to run it or fail to shut off the water, your insurer is unlikely to cover the resulting damage.
Insufficient Documentation
Insurance companies want to see ample evidence of the cause and severity of your water damage, and they will usually refuse to pay if you can’t provide it. Make sure you have clear videos, photos, and written documents to support your descriptions. These might include estimates and receipts from companies who dealt with the damage, as well as any other documents detailing what they observed.
Policy Language Matters: Exclusions and Endorsements
Home insurance policies typically include a section for exclusions, which are exceptions to the general coverage provided. Water damage insurance exclusions refer to specific risks or claims that the insurance policy does not cover, such as flooding or sump pump failure. Reading this part of your policy is crucial to understanding its full scope and when the expense of repairs will be solely your responsibility.
Your policy may also include a description of potential endorsements. These are policy add-ons that can help cover damage related to certain exclusions, such as concealed or hidden water damage resulting from leaks that are not visible. Another popular endorsement is coverage for water backup and sump pump overflow. Some insurers allow you to purchase flood insurance as an endorsement, but more often, you will need to purchase a separate policy through the NFIP.
The Importance of Prompt Reporting and Documentation
When your home suffers water damage, report it to your insurer as quickly as possible. Water damage worsens over time, increasing the cost of repairs. Insurance companies want to keep repair expenses down, so they may not pay for the restoration process if you wait too long to report the damage. Most policies also have time limitations on filing claims, and missing the deadline usually leads to a denied water damage claim.
In addition to filing promptly, document the damage and its source by taking photographs and videos of the affected floors, ceilings, and walls before making repairs. However, don’t allow the damage to continue unchecked while you document it, as this could also result in a claim denial.
What To Do if Your Water Damage Claim Is Denied
An initial denial from your insurance company is discouraging, but you don’t have to give up. Appealing a denied water claim prompts your insurer to look at the claim again and reexamine potential errors in their decision.
Follow these steps when your insurance claim is denied for water damage:
- Review the denial letter carefully and pinpoint the specific reasons for denying the claim.
- Reread your insurance policy, paying special attention to any exclusions.
- Get an independent evaluation from licensed contractors and water damage specialists.
- File an appeal or reconsideration request in accordance with the insurer’s requirements and procedures.
If your denied homeowners insurance claim is questionable or complex, or you are struggling to navigate the appeal process, consider speaking with a public adjuster or attorney knowledgeable in insurance claims. They can review the details of your case and assist you in developing an effective response.
An attorney can also assess whether your denied water damage claim may constitute insurance bad faith. This occurs when an insurer unreasonably denies a valid claim or intentionally withholds a fair settlement.
Get Help With Your Claim From Lawrence & Associates Accident and Injury Lawyers, LLC
At Lawrence & Associates, we understand the challenges you’re facing, and we’re here to protect your rights every step of the way. Our experienced Cincinnati and Northern Kentucky personal injury attorneys can guide you on what to do—and what to avoid—so you don’t unintentionally harm your case.
Call us today for a free, confidential consultation or fill out our online form to get started. You can reach us in Ohio at (513) 951-6723 and in Kentucky at (859) 251-3045. Let us fight for the compensation you deserve while you focus on repairing your home.
