My Hurricane Harvey Claim – FAQs
By Jeffrey D. Crawford, Attorney
My homeowner’s insurance company says that the damage to my home is not covered (“excluded”) because it was caused by the flood, and my policy does not cover flood damage. Is this right?
That depends! Insured property owners should often have coverage for at least some, if not all, of the damage caused by a hurricane. Whether there is coverage depends on several factors, such as:
- Location: Where your home is/was located makes a difference. For example, was it on the coast or was it inland? Was it in the path of the storm, or was it not?
- Causation: The specific cause of the damage makes a difference. For example, was it wind, wind-driven rain, trees, or other falling objects? If water caused the damage, what was the source of the water that entered your home? Rain or rising waters?
- Policy Language: The specific wording of the exclusions in your homeowner’s policy.
- The Law: Laws in your state relating to insurance claims, contracts, and unfair business practices.
My adjuster is very friendly and seems extremely knowledgeable. Shouldn’t I rely on what he says?
There are a variety of reasons why your adjuster may be wrong when he or she tells you that the damage to your home is excluded because it was caused by flooding. Also, remember that insurance companies are for-profit businesses. Their employees are not social workers. The goal of your adjuster is to close your claim quickly and without paying one red cent more than is necessary to do so. So, your adjuster may be “friendly”, but he/she is not your friend. And sometimes, they just get it wrong.
I’ve been with this well-known company for a long time, and I’ve paid them a lot of money by way of premiums. Surely they wouldn’t mislead me and risk losing my business, right?
Naturally, insurance companies are trying to minimize payouts following a disaster. As you’ve probably already noticed by reading your policy, there is a lot of confusing wording and legal language in there. Many adjusters, when reviewing a claim will read the policy with a bias that is way too far in the favor of their company, and against you the customer/policyholder. Like most people, your home is probably your biggest asset, and you paid good money for insurance to protect it. There are laws that protect you from wrongful denial of your claim, underpayment of your claim, and late payment of your claim. Don’t be pressured into accepting an insurance adjuster’s denial of your claim without first getting a second opinion on (1) what really caused the damage to your home; (2) what the wording of your policy really means, and (3) how much it will really cost to repair the damage the right way.
I really don’t want to get into a long, drawn-out lawsuit. Isn’t there something else I can do?
You bet. Read the entire policy, and look very closely at the wording of the specific exclusion the adjuster is relying upon to deny your claim. Also, examine in detail the brochures and sales materials you were given when you were sold the policy. If you don’t have those, you may be able to find them archived online. You may find promises made by them in those materials that they are not honoring.
You may be able to use your own legal arguments to convince your insurance company to change its position without getting involved in a lawsuit. If this doesn’t work then, considering that insurance policies are really contracts that are written by insurance company lawyers, you might consider obtaining legal advice before taking their word for it that your claim is not covered.
Talk to your neighbors and others in your situation. One of them may have taken a home video that shows the wind came before the water, thus changing the nature of your claim and resulting in coverage. Consider hiring a “forensics engineer” who is experienced in evaluating hurricane damage. If the engineer concludes that wind or another covered “peril” was a triggering cause in your neighborhood, then present that information to your insurance company and refuse to take “no” for an answer.
Although you may feel tired, discouraged, and in no mood to fight, it simply does not make sense for you to take “no” for an answer from your insurance company this soon in the process.
Your neighbors, fellow citizens, elected officials and those in the media are paying attention to how insurance companies are treating storm victims such as yourself. That may help you get a fair shake. Again, it’s still very early in the process, entirely too early to accept total denial of your claim or to under-settle it.
My home is waterlogged, but it’s not totally destroyed. Therefore, does the flood damage exclusion in my policy mean I am entitled to nothing?
No. If there is evidence of water coming in through any type of opening that was caused by wind (such as a damaged roof, siding, or window frame), then it should probably be a covered claim.
My home is on the coast and my adjuster is saying the damage is not covered because it was caused by a storm surge. Is that right?
It may be that your home was severely damaged, or even washed away by a storm surge, but if it was first hit by heavy winds that may not matter. Wind and wind-driven rain are typically covered in standard homeowner policies. High winds can drive rain and debris up and under the roof and into your home. If by the time the water got to the home it was already destroyed by wind and rain, then that can make all the difference in your claim.
The adjuster is telling me my foundation was not affected by the storm. May I rebuild on top of it?
Give strong consideration to obtaining a second opinion prior to rebuilding on an existing slab/foundation that has been through a hurricane the likes of Harvey. Concrete can fail due to damage that cannot be seen by the untrained eye. Most adjusters have no training the science of concrete construction. Have a foundation company come out and verify the adjuster’s opinion or give you an estimate to repair or replace the foundation.
The price of labor and materials has increased considerably, but my insurance company says it will pay only what appears in its “pricing guidelines”. What can I do about this?
The costs associated with labor and materials inevitably skyrocket after disasters, thanks to supply, demand, and greed. “Guideline pricing” is something insurance companies use to predict how much labor and materials should cost. This speculative system can often times become flawed and problematic because real life demands flexibility. No one can accurately predict the change in prices of materials and labor after a natural disaster, especially one as wide-spread and catastrophic as Hurricane Harvey, and it’s not fair (or legal) to make you wait until prices stabilize to start repairing your home and rebuilding your life.
Be prepared for your roof to be a hotly contested item. If the insurance company prices roof repair at $160 per square foot, but the market prices is $250, then be sure to keep all of your receipts and demand the difference, along with whatever amount they “held back”.
The insurance company keeps reducing the amount of what they are going to pay me by “depreciating” my damaged belongings. What can I do about this?
Depreciation is not a science. It’s very subjective. The adjuster will make a decision as to what items should be depreciated, and by how much they should be depreciated. If their numbers are not realistic, It’s up to you to argue for more reasonable amounts. Keep in mind that not everything in your home is subject to depreciation. Paint, vinyl, and roofing shingles are exposed to the elements. They deteriorate and are thus subject to depreciation. To the contrary, the underlying materials that hold your home together, such as studs, framing, rebar, and cement, do not deteriorate and are not subject to depreciation. Don’t allow your adjuster/insurance company depreciate items that are not supposed to be depreciated.
I’ve obtained estimates from contractors and they are considerably higher than the estimates the insurance company has obtained. How do I resolve this so that I can use the estimator I know and trust?
This is an extremely common problem. If you have submitted all of the information that your insurance company needs to pay your claim, written follow up letters and phone calls to supervisors and higher-ups in the company, and still they refuse to listen to your reasonable demand for payment, then you may consider appraisal or mediation to resolve the dispute.
Mediation is an informal way of resolving legal disputes without going to court. The appraisal process is like a mini-trial, without a jury. Almost all homeowner’s policies have an appraisal section that is designed and included to resolve disputes over repair estimates. If you decide to use the process, you should strongly consider getting some help from experts who do not work for the insurance industry, or else it’s likely you will be wasting your time and money. However, be aware that most insurance contracts require each side to pay their own costs and share in the cost of the umpire. This can get costly so you’ll need to weigh the amount you are fightin over with the amount you may be required to pay for an appraisal. If you are considering appraisal, read your policy carefully and contact an attorney.
Finally, read any and all correspondence from your insurance company very carefully paying attention to any deadlines.