Burst pipes from a deep freeze, soot damage from an oil burner puff back or a flooded basement from a hot water heater relief valve failure, these are all typical conditions that are covered under just about every general liability policy. When these types of claims are called in, you will typically get a positive coverage determination directly from your insurance carriers claim intake coordinator. But when conditions aren’t so cut & dry, or the source of the condition is not definitively known, that uncertainty is usually met with a delayed coverage determination. These delays in having a clear coverage determination place an insured in a precarious state on whether to move forward with cleanup paying out of pocket or with waiting an undetermined length of time for a coverage answer
Rapid water removal & dehumidification is key
Most every insurance policy will contain language which obligates an insured to expeditiously mitigate the condition to prevent additional damages, which is to help minimize the financial cost to the carrier. When there is a substantial water leak, water can soak up deeper into furniture, wick up higher & higher into interior & exterior walls and quickly lead to harmful bacterial growth. When conditions are optimal, dangerous mold growth can occur rapidly, sometimes within 48-72 hours, for this reason, rapid water removal & de-humidification is needed.
Delayed Coverage Determinations can cause more damage
With a typical covered loss, an established, reputable water mitigation company will provide emergency water cleanup services “on credit”, the same day. They can complete the cleanup & bill the cost of their services to the carrier. They know that it’s very difficult to determine the full extent of the damages on the initial assessment. Often there will be multiple layers of flooring encountered or other types of unusual conditions that necessitate additional labor. With a covered loss determination whatever scope of work that is needed to provide the proper cleanup to accepted cleaning industry standards will be paid by the carrier assuming proper documentation can be made. When there is a delay in coverage determination the insured is placed in a precarious situation in choosing to hire a contractor under the same arrangement as mentioned above or wait for a coverage answer and risk a sticky situation with the carrier for not mitigating damages expeditiously.
The typical insured most often waits for a coverage determination which can take a week or more. The timeline for the determination looks mostly like this. A claim is started with no coverage determination and a field adjuster is assigned and will call with 24-48 hours to set an appointment for a visit to the site. The field adjuster comes within a day or two and takes pictures, looks for the cause/source and interrogates the insured as to what they saw, know and did. Then the adjuster presents the findings in a report to the carriers’ desk adjuster who will make a coverage determination. One week wait for an answer would be quick if you can get it, now what happens?
What typically happens next yet mostly depends on the type of insured we are dealing with. Waiting a week or more seems quite risky and likely very disruptive to the dwelling for as the more days go by, the smell can become extremely foul. The DIY type will just grab their shop vac to suck up the water and then set up a couple of typical house fans to hypothetically “Dry” the space out. Sounds good, right? In reality it didn’t actually do much, in fact it likely made the situation worse. How’s that you ask? Blowing air on wet surfaces makes the moisture absorb into the air causing the whole space and every surface within it to be in a high moisture environment exposing everything to additional damages from moisture. Without substantial, simultaneous de-humidification this is the worst thing you could do. Your carrier will be ecstatic if you do this as they will have likely saved a boatload of money not having to pay a professional water damage restoration contractor for the “proper cleanup”. Please don’t do this. Read the Do’s & Don’ts on water damage here.
The smarter choice: A Restoration Contractor
Starting the cleanup process ASAP prior to hearing back on your delayed coverage determination
Another approach would be to hire a water damage restoration contractor and pay out of pocket. Assuming your loss has coverage, you could submit your paid invoice to the carrier for reimbursement. We suggest that when faced with a “no coverage” determination scenario you use your restoration contractor as a liaison in a consulting capacity to help push the decision process along. This contractor will likely know the adjusters well as they have interacted with them on many other claims throughout the year(s), plus they would much rather work through the carrier under the accepted rules of not having to firmly commit to a scope of work due to unforeseen damages. The typical out of pocket job for an insured will most likely be a firm price and when unforeseen damages are found it creates an uncomfortable situation with an already frustrated insured.
We have been seeing the “no coverage determination” scenario more often as of late. The reason could be a money saving scheme by the carriers or it could be due to inexperienced claims reps or short staffed claims departments. Whatever the reason we hope this information helps you make a more informed decision if faced with this issue.
For more on restoration related topics, please visit our website at www.truerestorations.com
The True Restorations Team