Smoke Damage To Do List

Experiencing a fire in your home can be devastating. But even if you have fire insurance, you may have trouble filing a claim for smoke damage in your home. If you’ve been frustrated by an insurance agency that’s refusing to pay for smoke damage, then we want to help. Here are some of the most important tips to know about smoke damage insurance claims.

 1. Your insurance policy will likely cover losses you experienced in the fire. With that in mind, your first job after experiencing smoke damage in a fire is to thoroughly document your losses and damages.

Make a list of information that includes all of the following about your property:

  • Date of Loss
  • Type of Loss or Damage
  • Location or Damage
  • Any Related Injuries
  • Others Involved
  • Condition of the Home
  • Description of Damaged Contents
  • Whether or Not Temporary Repairs or Complete Replacements Are Necessary
  • A Police and Fire Department Report

Remember: your insurance company likely requires you to contact them within a certain amount of time after a loss has occurred. Make sure you know that amount of time and file your damage claims on-time.

2. You’re going to exchange hundreds of emails and documents with your insurance company over the next few months. Make sure you document everything. Get a binder or good storage system, to start.

A typical homeowner’s insurance policy will cover damage caused by wind, fire, and lightning. If your home is destroyed by a fire, then the insurance company needs to pay to build you a new home. A typical insurance policy will also pay to replace or repair anything inside that home that may have been damaged by flames, smoke, soot, ash, and other byproducts of the fire. Smoke damage is nasty and can affect virtually everything in your home. Many of your possessions and furniture may need to be discarded – even if they don’t look badly damaged.

Remember: you pay for insurance specifically to cover situations like this. Document all of the items in your home that have even small amounts of smoke, soot, or ash damage. Your walls may be stained black, for example. Floors and carpeting may be permanently ruined with soot. Even your ceilings could turn an ugly shade of black. Upholstery, drapes, clothing, and family heirlooms can all suffer damage.

3. After documenting smoke damage and speaking with your insurance agency, you should pay for professional cleaners or remediation experts to enter your home. Most insurance policies will cover professional cleaning costs (check to make sure). It’s unsafe for you to clean your home after a fire. Soot and ash can have lifelong effects on your health. Professional cleaners and remediation teams have specialized equipment and personal protection devices to safeguard them against smoke damage in your home.

Many homeowners will try to clean up smoke damage themselves, only to realize that water-based cleaners only make the stains worse. In more extreme cases, you may also have to pay to deodorize the house or replace insulation in the walls or attic. However, professional cleaning or remediation is a good start.

A Brief History of Mold & Insurance

The response to mold claims by the insurance industry significantly changed the risk management and insurance needs of restoration contractors. Insurance claims for mold damages exploded onto the scene between 2000 and 2001. The short-term benefit to restoration contractors was a sudden surge in demand for mold remediation services and a seemingly endless supply of money from insurance companies to pay them. Unfortunately for the insurance companies, they had not anticipated “toxic mold” claims and had not priced their policies accordingly.

In response to surging toxic mold damage claims the insurance industry implemented their mold risk management strategy: risk avoidance. Insurance companies avoid mold risk by issuing over one hundred million mold exclusions and limitations annually. These exclusions can be characterized as universal mold exclusions. Although mold exclusions and limitations are not standardized and vary a greatly in scope, they are universally applied in virtually all forms of property and liability insurance. By implementing a mold risk avoidance strategy, the insurance industry was able to dump billions of dollars of mold related damage losses back into the economy.

This was successfully accomplished without a rate reduction or a whimper of protest from insurance buyers, lenders or insurance regulators. Score a big win for the insurance companies! But the insurance industry’s success in managing its mold loss exposure only increases the risk of uninsured mold losses for all of their policyholders and insureds. California, Illinois, Kentucky, Michigan, New Jersey, New York, Wisconsin

The introduction of universal mold exclusions had four major impacts on the restoration business.

  1. Property owners now have a lot less insurance coverage to pay for mold losses than they once had. This decreases the overall demand for mold remediation services.
  2. Without insurance to cover mold damages, property owners will seek more qualified firms to perform mold remediations. This increases demand for the more professional, better- trained remediation firms.
  3. The potential liability loss exposure of a contractor is increased because property owners may need to seek outside sources of funding (liability lawsuits) to pay for their mold losses.
  4. Contractors no longer have insurance for mold damages in their General Liability insurance policies because all of these policies now have mold exclusions. For this reason restoration contractors now need to purchase separate Contractors Pollution Liability insurance to fill the gap in their business liability insurance protection.

What is a Mold Rider?

Homeowners insurance covers mold if you purchase the coverage rider. In some states, the coverage is included automatically, and it is important to review this information with your insurance agent to properly verify it is accurate. Many states limit the amount of coverage offered for mold. Typically, an all-perils type policy provides coverage for mold unless it is specifically excluded or limited. You can find this information on the declarations page of your insurance policy. When purchasing a homeowners insurance policy, ask how much coverage the policy provides for mold.

Water Damage

Water damage claims and mold usually go hand in hand. For most insurance claims to be covered, the cause needs to be sudden and accidental. Mold damage from a pipe that has been leaking for years is likely going to be denied by your insurer. In the event of a water leak, it is important to address the problem as soon as possible. Many disaster cleanup companies are available 24/7 and take proactive steps to limit the possibility of mold growth. Additionally, these cleanup companies are usually covered by your insurance.

Mold damage caused by a flood is not covered under your homeowners policy. Flood insurance requires a separate policy issued through the Federal Emergency Management Agency (FEMA) or through a select number of companies that offer private flood insurance. Many consumers look at the final price of their homeowners policy to make a determination on which company to choose. Review all of your coverages, including a rider for mold, to ensure you are properly insured.

Home Owner Insurance Tips – Part 3

Our final part concludes this look into Insurance Tips when dealing with your property.

6.  Don’t Wait – When buying a policy, make sure to ask about time limits to report a claim, and then abide by them! If you wait too long, you may not be eligible for benefits—especially if waiting has made the problem worse. David Baxter works for a residential and commercial restoration company in Florida, and he remembers a customer with water damage who waited almost a month to do anything about it.

7.  Document Everything – Senen Garcia, a lawyer in Coconut Grove, Fla., represents homeowners against insurance companies that fail to pay out on valid claims. He’s seen many denied claims because people don’t keep good enough records. “Homeowners must document everything that occurs during a loss, do as much as possible to mitigate [the loss]—and document such mitigation,” Garcia says. In addition to saving receipts, contracts and appraisals, document phone calls by writing down who you spoke to and when. And be sure to stow it in a secure place! Don’t want to invest in a safe? Consider keeping digital copies online using a program like Dropbox.

8.  Jewelry – When David Cohen lost his wife’s rings, he was relieved that his homeowner’s policy covered jewelry—but it was only up to a maximum of $3,000. “My wife gave me her rings to hold,” he says. “So I promptly put them in my jacket pocket … and then forgot about the rings when I took the jacket to the cleaners. As you can imagine, they were gone.” Within three weeks, the Cohens received a check from their insurance company, but they were still out a good deal of money because his wife’s engagement ring was worth $6,000 alone. The lesson? When signing up for homeowner’s insurance, note the limits on jewelry. “Most people don’t realize that things like wedding rings aren’t usually covered by the basic limits in their policies,” Derrick says. “You can get an appraisal at your jeweler, and then consider buying a supplemental policy to cover it.”

9.  When To File – A large section of Richard Clayman’s wooden backyard fence came down in a storm. “I didn’t think there was any way my homeowner’s policy would cover it—and my neighbors assured me that it wouldn’t,” he says. But he called his insurance company, just in case. “The agent asked how high (the fence was), what kind of wood it was and how much of it needed replacing. Next thing you know, I get a $700 check in the mail!” Theresa Roma has a similar story: A bad windstorm took roof shingles off her house, and she almost didn’t file a claim because it didn’t feel worthwhile. In the end, she received over $25,000 for a new roof. The obvious mishaps aside (fire, major flood, etc.), it can be beneficial to file a claim when in doubt, but Derrick cautions restraint. “Don’t file a bunch of frivolous claims,” she says. “The claims history for your property is also what determines your rates, so it’s better not to cry wolf, unless you have a real claim.” The repercussion if you file needlessly? A possible uptick in your premium.

10.  Good Maintenance Helps – Insurance companies would rather pay as little as possible to repair damage, so they prize early detection and prevention. Deacon Hayes and his wife paid for a routine checkup on their air conditioner because they live in Arizona and wanted to make sure that the system was ready for summer. “The specialist told us that the unit was on its last legs because of a hail storm,” Hayes recalls. Thanks to his diligence, Hayes’s insurance policy ended up paying for a new $4,000 A/C unit. One very important thing to keep an eye on is your water bill. If you notice an unusual spike or trend upward (and it’s not just because it’s 100 degrees outside, and you’re watering your lawn more), you could have a leak somewhere. Finding the source early could save you from dealing with a bigger headache when a major pipe bursts.

Home Owner Insurance Tips – Part 2

Continuing where we left off on what insurance policies cover and don’t cover, we focus on shopping around, preventive actions and replacement coverage.  We’ll also use some actual examples of individuals who had differing experiences with their insurance companies and adjusters.

3.  Shopping Around – Before committing to a policy, take the time to research an agent whom you trust—preferably one with good reviews online or via a personal recommendation. It’s certainly something that Ramzy Ayyad, who struggled to receive benefits following a house fire in November 2008, recommends that prospective homeowners do. “I had to deal with a rude adjuster,” he says. After complaining assertively to the adjuster’s boss, Ayyad finally received a check for the damages—but the process was exhausting. By contrast, Terri Corcoran has nothing but glowing reviews for her adjuster. After a snowstorm caused a major leak in Corcoran’s laundry room, an insurance agent came to her home to assess the damage—and promptly determined that the entire room needed to be redone. “They wrote me a check on the spot for what it should cost,” Corcoran says. “I was really impressed by how the company responded!”

Bottom line? Don’t just shop for a policy. Make sure you also select the best agent.

4.  Preventive Actions – It may sound like common sense to have a working smoke detector, but did you know that it might also help you land a lower insurance quote? The same goes for a burglar alarm. You can reduce your premium by about 5% if you install something as a simple as a deadbolt, and up 15-20% for a burglar alarm system. Insurance companies price your premium based on how much risk they foresee, so you can reduce the premium by reducing your liability risk, thanks to some smart preventive measures. For example, if you have a pool, you may be able to reduce the likelihood of a claim—and thus, possibly lower your premium—by installing a fence and a pool cover to minimize the risk of a neighborhood kid wandering onto your property and falling in.

5.  Replacement Coverage – There are two key distinctions that every homeowner should know: “replacement cost” versus “market value.” Replacement cost covers repairing or replacing your entire home. Market value is how much someone would pay to buy your home and accompanying land in its current downtrodden condition. When you’re considering the type of coverage to take out, a policy that’s based on market value is typically less expensive but, as State Farm puts it, “for a cash-strapped homeowner, buying a policy based on market value offers the best chance to recoup at least partial expenses after a loss.” In other words, you won’t recoup as much in the event of a serious disaster. For those who have a good emergency fund in place, Derrick says that there is a way to possibly get more substantial coverage and still pay lower premiums: “You might consider getting a policy that covers more in terms of replacing or rebuilding your property, but with a higher deductible.”

Home Owner Insurance Tips – Part 1

Insurance requires you to think about bad occurrences … medical problems, car accidents, emergency home repairs. But although it may sound pessimistic to dwell on what could happen, it’s important to protect yourself from some of life’s biggest surprises. When it comes to protecting your home, it’s not just about safeguarding against structural damage or theft—it’s just as much about feeling secure in where you live. If disaster strikes, your focus should be on reclaiming your sense of stability. The last thing you should worry about is money.  Here’s what you should know.

  1.  What It Covers – A typical policy will pay for damage to your property and your possessions in the event of certain storms, fire, theft or vandalism. Like renter’s insurance, it also provides liability coverage if someone gets hurt on your property and decides to sue. Homeowner’s insurance also covers shelter costs, so you don’t have to face crazy hotel bills if you’re temporarily displaced from your house. Homeowner’s insurance can protect belongings outside the home, too. If something is stolen from your car, auto insurance won’t cover it—but your homeowners policy likely will. Most policies will cover your belongings when they are traveling with you. If you have a $1,200 laptop and it gets lost by the airline, call your insurance agent—right after you file the claim with the airline, of course.
  2. What It Doesn’t Cover – A standard policy has exclusions, including earth movements (landslides, earthquakes, sinkholes), power failure, war, nuclear hazard, government action, faulty zoning, bad repair or workmanship, defective maintenance and flooding. Windstorms are typically covered, including tornadoes, although insurance companies exclude tornadoes or hurricanes in some high-risk areas. Water damage is tricky. As a rule of thumb, water from above (rainwater or a burst pipe in an upstairs apartment) is usually covered, but water from below (backed-up sewers or ground flooding) generally isn’t. If your region is prone to floods and earthquakes, you should consider supplemental coverage.

Check Back for Part 2 & 3

Asking For Insurance

There’s many benefits to asking for a contractor’s insurance prior to any work being completed, but the one that can prove most vital is in the case where damage to your occurs due to contractor error.  Recently, a customer called us with an emergency water damage job caused by a contractor who drove a screw through a water line accidentally.  The water damage was extensive since the leak originated on the third floor and made it’s way to the basement flooding inside the wall cavity.  After we spent several hours cutting open walls, cleaning up water and setting equipment to structurally dry the home, the invoice was over three thousand dollars, and this doesn’t include rebuilding the demoed walls.  The contractor who caused the water damage, said he wasn’t going to pay the home owner because they didn’t allow him to fix the problem.  This response is wrong on so many levels since the contractor isn’t certified in water damage restoration or mold remediation.  He also refused to give his insurance info to the home owner who was then forced to call her insurance and a lawyer.  Much of this could have been avoided is she had proof of insurance from the contractor who caused the damage, because she could have just called and filed a claim.  So here’s a few insurance points to remember to help you prior to hiring a contractor:

  1. Ask for proof of insurance.  Get the certificate rather than just allowing them to tell you they’re insured.
  2. Call the carrier and make sure the policy is up to date.
  3. Ask the carrier if they are covered for the work being performed on your home and detail what is getting done.
  4. Ask the limitations on the policy and what may not be covered.

Taking a few moments to do this can save you thousands of dollars, weeks or months of battling and the headache that comes with hiring uninsured or ill-equipped contractors.