Water damage is among the most common causes of insurance claims. When standing water gets trapped in pipes and the temperature plummets below freezing, the frozen water expands and bursts a hole right through the pipe or breaks the pipe at its seam. If it is not caught in time and the water starts to thaw out, you could be facing massive loss and damages.

Most of you reading this want to know if your frozen pipe damages are covered by your insurance policy. In general, water damage from a burst pipe will be covered by a standard homeowners, landlord and commercial insurance policy. But remember, not all insurance policies are alike and each property owner should take the time to check for coverage either by calling their agent or reading their specific policy. Some policies require the insured to maintain a certain temperature in buildings and homes. Others require policyholders to have a working alarm system so in the event the heat is off, it sends an alarm to a central monitoring location so the policyholder or a service company is notified and can make the necessary repairs. Failing to maintain policy requirements with these types of clauses in them can trigger a claim denial, so beware. How you report a water-damage claim to your insurer can also make a huge difference. Do not use the word “flood” under any circumstances because insurance companies have a specific definition of the word flood and floods are only covered under a separate policy. Even using the word in a casual context when making a call to your agent can cause you trouble later. Always refer to your claim as “water damage.”

Common Myths about Pipe Bursts
The bad news is that policies typically do not afford coverage to the damaged pipes themselves. So the property owner will be responsible for repair or replacement of the broken pipes and any associated plumber costs.

One other water damage claim myth we have seen in the news is that “most restoration companies bill insurance companies directly for the dry out and other emergency services.” This can lead to one of the biggest financial mistakes a property owner can make.

Protect Your Frozen Pipe Leak Claim by Understanding Your Responsibilities
Just as it is important to understand coverage, it is a duty of the policyholder to start the cleanup, dry out, and mitigation process in order to prevent further damage from occurring. Naturally, there will be pressure on the policyholder to hire qualified and professional help. Given this high-pressure environment, policyholders need to keep their eye on the ball or in this case the money. Unscrupulous contractors will no doubt try and take advantage of many folks and it is important the policyholder read and understand the work authorization forms that will be pushed on them by the emergency service crews. Even if they are supposedly sent from the carrier! Keep in mind that you are signing these forms, not your insurance company. Remember that in catastrophe type situations such as widespread frozen pipe leaks, price gouging can occur. Your insurance company is not likely to pay anything but “reasonable and necessary” clean-up and repair cost. The balance of the bill will be your responsibility since you agreed to pay when you signed the work authorization form.

You can avoid this problem by trying to add language to the work authorization stating that: “any billing is subject to an agreement and approval by the insurance company.” Some emergency service companies may balk at this, but others may agree so they don’t lose the business. Having the clout of your insurance company in disputes regarding emergency services costs can be a powerful ally. If you do not have this spelled out on the emergency service agreement contract up front, you likely have the burden to try and negotiate any dispute yourself. Your best bet to avoid this problem is have to the insurance adjuster and the contractor agree on the scope and price of the loss before commencement of the work. Unfortunately, in large catastrophe situations, it may be days or weeks before an adjuster gets out to inspect your loss. So while a claim may be reported and a claim number assigned, remember you are going to be on your own in the initial stages of the claim. Please pay attention to all that is being done and said.

We also suggest you keep a daily diary of all conversations and commitments that take place, with names, phone numbers, emails, business cards etc. preserved for later reference if needed. Use email to send confirmations, instructions, etc. that may be given by any party to you about your loss.

Your water-damage claim also might be denied if your insurer concludes that you are responsible for the pipe bursting in the first place. Most pipes that burst do so because they freeze. If you left your home unheated during freezing weather, your insurer can cite your “Negligence” as the basis for denial. Or if you failed to maintain or did not take the precautionary measures listed below, the carrier may cite “normal wear and tear” as their basis of denial. An example of this maybe an old or corroded pipe.
This is when using an experienced public adjuster to negotiate your claim can be helpful.

Article provided by MAREI member Kenneth Stokes St, from Stokes Public Adjusters.  When you need help with an insurance claim, call Kenneth.