How to deal with an insurance claim, resources to provide to the insurance company about covering the proper coverage.

One of the first questions we are often asked is: “Will my insurance cover any of this?” It’s a challenging question to answer especially if we haven’t yet been out to the home to evaluate. The short answer though is if something that occurred that your insurance company considers a “sudden and accidental occurrence” yes you are entitled to coverage based upon your insurance policy. 

Now let’s take a step back for a moment because typically if you’re calling us, odds are you may have multiple areas that are impacting your air quality. Some of these areas can be from a lack of maintenance, poor construction design that has gotten worse and worse over time, improperly done renovations that left you vulnerable to mold growth conditions (such as over insulating the attic and blocking the soffit ventilation system). These things will not be covered. You also have a statute of limitations meaning if you had a leak and didn’t report it as a claim and three years goes by before you realize it’s impacting your health, too much time has elapsed for you to be entitled for coverage. For this reason, it’s important that we educate you on insurance process and if you click here, you can learn about how to set up your insurance preventatively so that in the event you do have an insurance claim in the future, you’re properly covered.

What is a sudden and accidental occurrence?

Sudden and accidental damage means that whatever has happened was sudden and accidental and is not the result of damage that has happened over time.  This could be a sudden storm that blows through damaging the roof structure and allows water to come in.  This could be a sudden and accidental pipe break or leak that happened and caused water damage to the home.  This does not mean things like water intruding into your basement or around windows over time as the degradation of the structure began to take place.  That’s why it’s important to do routine inspections of your home to properly maintain the home against degradation of the structure that can cause moisture and water to intrude.

If I have a sudden and accidental occurrence, will they cover the claim?

This is where things get tricky because most policies will have a limit per occurrence that they will cover.  Because insurance companies are a business entity that needs to profit to stay in business, they look to reduce risk and exposure so that they are around when you need them.  Unfortunately, at the same time when most of us buy insurance we are not educated enough about insurance to know what types of coverages we should want.  At default, most companies will give you $10,000 in mold and fungi coverage. This means that if it costs more than $10,000 to eradicate the mold (which it often does) they will write you a check for $10,000 and you will be responsible for the difference. The good news in this, is that water damage and reconstruction costs are covered up to policy limit.  At the very least, if you have a covered loss while you may not get reimbursed for every dollar spent on remediation, at least it is worth it to get reimbursed for the water damage (demolition and drying) and reconstruction portions of the project.

My insurance company wants me to use one of their preferred vendors but I don’t think they are best equipped to handle mold for my health, what do I do?

It’s true that insurance companies have relationships with national contractors and will refer them to you.  Many of these companies are more water damage experts than they are mold, even if they do have the proper licensing to perform mold remediation.  The good news is, you have the right to hire whomever you choose. The main difference between using a company like All American Restoration and a national chain is, our focus on mold remediation is much more comprehensive.  They will not validate the presence of mycotoxins, endotoxins, or data on an ERMI/HERTMSI/EPA36. In fact, I have consulted on the side of a client against these companies hygienist who say there is no evidence that mold causes adverse health reactions and that doing remediation to that degree is unnecessary. While it’s apparent that we strongly disagree with that opinion (and it is an opinion and not fact), it’s important that you know you can hire someone who’s more aligned with the fact that you want the place fully restored as if the sudden and accidental occurrence never happened. Now we know that is a popular slogan amongst the insurance restoration industry, but accredited laboratory results would indicate otherwise in most cases.

My insurance company says your scope of work is outrageous, over the top, and unnecessary but I do not agree.  What should I do?

First off, I think that is not something that you (the client) should have to justify.  In this case, I would stand your ground and say that this is the company I want to use and it’s your responsibility (meaning the responsibility of the insurance company) to communicate with the company (All American) and come to an agreement.  It is our job (All American’s job) to justify the scope of work and pricing and not something that should weigh heavily on your shoulders.  We stand by our scope because its in our client’s best interest and not in the insurance company’s interest to save on costs. We don’t look at things from a dollar perspective, we look at what the best scope of work is to eradicate the environmental contaminants that were created by the sudden and accidental occurrence. We explain to the insurance company utilizing the laboratory data to explain why things need to be done this way and that alone justifies the cost.  Costs are always relative to the scope of work being performed so when the insurance company says we found a guy who is more reasonable it’s because their getting reasonable with the amount of work to be done and that is dangerous in making sure the environmental contaminants are fully eradicated. 

What happens if my insurance company denies the claim even though I think it is clearly a sudden and accidental occurrence.  What can I do?

Sometimes they deny the claim due to other professional’s recommendations.  If they can’t identify the cause and origin of the sudden and accidental occurrence and they employ the efforts of one of their engineers, typically the engineers will say their isn’t sufficient evidence that this is a sudden and accidental occurrence and they will deny the claim.  In this case, it may be better to start the work out of pocket, get the source located and provide proof that it was indeed a covered loss and at that point you are entitled to reimbursement. The more extreme way to handle things would be to hire an attorney and fight it but often even the attorney will need some sort of proof that you are entitled to that coverage. Most insurance adjusters are not expert in mold damage and do not fully understand what’s going on.  If it’s not abundantly clear to them they will deny the claim until they have a more concrete understanding that we happened is a covered loss. At All American Restoration, when we come to do a free estimate we will give you the hard truth about whether or not we think there is a covered loss. 

I have a covered loss and I’m appropriately covered but the insurance company is denying your scope of work, What are my options? 

This is a common problem we face that doesn’t have a real clear cut answer.  The basis for this is that the scientific and medical community do not agree that biotoxins are a problem and that some testing such as ERMI is “experimental” and does not validate the need for more work.  I think we can all agree this is nonsensical and dangerous to gamble with people’s health and at the time of this writing there is a lot of medical research out there stemming all the way back to the late 80s and 90s that mold and its byproducts can impact our health (click here to look at the history of mold to find more information).  The main issue is in the 90s there were hundreds of millions of dollars in toxic tort cases that created this divide in the communities. This led to the CDC walking back their claims on how mold impacts our health in the early 2000s. Today, the general consensus is that mold impacts “some people’s health” if they have pre-existing conditions or a “mold allergy” but it doesn’t provide a clear pathway to what those pre-existing conditions are in order to develop the guidelines for those subset of people.  This can quickly turn things into a nasty court battle to be compensated for doing the work needed to restore the optimum air quality (Click here to learn more about our legal resources in helping our clients and their toxic tort attorneys prepare a case). At the end of the day, I think the best path forward is not to cower to the insurance company’s demands of what they are willing to do but rather put the adjuster in touch with us, your mold hygienist, and your doctor so that we can work as a team to explain to them how this could impact your health if this project isn’t done right and contamination is left behind. While they may be reluctant at first, explain to them how you are sensitive to mold and you just want them to hear out the experts you have around you so that they can understand why we are presenting things the way we are and that at the end of the day you just want your property restored to the level it was before the covered loss. If they’re still not willing to expand their horizons, ask for a supervisor. Ask for the supervisor’s supervisor. There is a hierarchy with any company and when you finally find someone who cares about you and your needs as a customer of theirs, that’s when you can finally begin to have a rational conversation. 

I had a covered loss and my insurance company brought a national water restoration contractor in and they made a mess and now I feel awful. What do I do?

This happens all too often where a national company comes in and starts cutting open walls without proper engineering controls, assuming it’s a Category 1 water loss exposing you to the potential environmental contaminants. Furthermore, they install all of these blowers in the space that are now blowing this potential environmental contaminants around the home.  This is a dangerous practice and we believe that even Category 1 water losses should have engineering controls in place because you simply never know the extent of the damage or where the water came from.  Not only can mold start growing in as quickly as 24 hours, but if you don’t know if that water came from a drain pipe or if it passed through rodent droppings as it made its way to the surface, how harmful that water source is from the start. We just consulted for a woman who had this occur where the water was actually Category 3 and the nationally recognized and reputable company cut open the walls and installed fans blowing the dust and debris all over her medical facility.  Not only did she have hundreds of thousands of dollars in equipment now exposed to environmental contaminants, her office was left an absolute mess. It’s now going to cost the insurance company MUCH MUCH more than it would have if the project was setup right from the start.  If this happens to you, the best advice I can give is to ask the company to leave immediately, document the practices the company employed that left you vulnerable, and immediately call your insurance company and let them know what happened.  At that point, you should hire an environmental consultant of your choosing (not the insurance company’s) and test for negative gram bacteria, and mold to build your case that this problem is now much worse.  The data will provide you with a new scope of work to eradicate the contamination present and restore your environment to undo the damage that was caused. 

Should I hire a Public Adjuster?

It’s a great question.  A public adjuster’s job is to represent you and adjust the claim to ensure you are covered to perform the proper scope of work.  A public adjuster usually operates on contingency and will get a percentage of whatever they get you.  I believe having a good public adjuster can be a great addition to your team to help settle the claim, however, a bad public adjuster can just as easily be problematic.  I have been on projects where the public adjuster was a hero and fought right along side of us and got us the proper coverage to do the proper job.  I have also been on projects where the public adjuster called the client and said “Don’t listen to your contractor this is the best deal I can get for you and you should settle on this now.  Also by the way I have a contractor that can do the project for this amount.”  Now, in this scenario the client went with the public adjuster’s recommendation and after failing all of the post tests, left the client having to re-do the work with us after the claim was closed.  Like with hiring anyone else, you need to properly vet the public adjuster and make sure they understand your goals, that they’ve worked with someone who is sensitive before, and are willing to stand by you to make sure the right scope of work is performed. If you get a sense that they want to fight hard for you to get you the right funds to do the right scope of work, they’re worth it.  If you get the sense that they will take the easy way out and accept any offer from the insurance company to get paid and move on, they’re not going to be right for you.  

What happens if I need to vacate my house, does my insurance company cover moving out and additional living expenses?

On your policy you have what’s called “Loss of Use” coverage. This covers you for costs associated with moving out and staying at another location until your project is complete. It’s important to review this section of your policy to see what your coverages are so you can look for another location that fits the budget allowed under loss of use.

What about my contents, if they’re damaged or contaminated what do I do?

You have another section under “Personal Property” that gives you a budget to clean and/or replace your personal belongings depending on what has occurred to warrant that.  There’s two terms you need to familiarize yourself with. Replacement Cost Value means what it would cost to replace it if you bought that exact item or something comparable today.  Actual Cost Value means what it’s worth today by taking into account wear and tear and how long ago you purchased it would indicate what value they would assign to it today. It’s obviously much more valuable to have the Replacement cost value as the problem isn’t what it’s worth but how much it costs to replace it with something comparable now. Once you understand your coverages it will be easy to know how to tackle this.  If you are covered for your personal property and the situation warrants it, all porous items would either need to be effectively cleaned or discarded and replaced.  All non-porous items can be effectively disinfected. Regardless of the items being cleaned or replaced, the cost of cleaning or replacing would max out at the policy limit before you had to assume responsibility to cover the rest. All American Restoration helps determine what needs to be done with your contents and more than likely, we will work with the insurance company to have a contents control team evaluate the contents, clean what can be cleaned, and inventory the items that need to be replaced. Click here to find more about contents and how to determine if they can be cleaned or not.

If you have any further insurance related questions that have not been answered on this page, give us a call today and ask to speak with us regarding questions on insurance. We will keep this page up to date as more questions are asked.

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