Rant: Home insurance exclusions

[LVSteve]

Why are we paying house insurance when so much appears to be excluded? I smell scam.

Discovered water where it wasn't supposed to be recently. Insurance company sent in the leak man and he diagnosed an issue with the master bath shower drain and/or the drain run towards the toilet. The water is appearing in a doorway between the kitchen and the dining area on the ground floor. As we don't entertain, we rarely use that thruway.

The weird thing is that we had no advance warning of an upstairs leak. No stains on the ceiling, and no staining on any of the walls. The only giveaway has been some odd effects on a cabinet if you look for it. I ran the shower for the guy and a bunch of water appeared downstairs.

So it looks like a minor leak is suddenly a big one. BUT, because it has been going on for a while (and in truth, I cannot deny this now I've really looked) the insurance company says it's my problem. Really? Any non-catastrophic pipe failure is not covered? What a damned racket.

 

[alwslate]

State Farm is my insurer. They changed their policy several years ago to cover anything beyond a certain percentage of the insured amount. There is just a deductible amount for any claim that the home owner is responsible for. Could this be your problem?

 

[444 Magnum]

Everyone should check their roof coverage. Many companies are dropping replacement cost on the roof shingles once they reach 15 years of age. They tell you to replace the roof or they will put it on a cash value basis only.

The cash value of a 20 year roof is almost nill. Not every company is doing this, but several are. Check your policy or check with your agent if you have an aging roof. If the roof is newer, make sure the insurance company has that documented.

I have customers who learned this the hard way. Insurance company said they "notified them in the mail about the changes". I'm sure it was a paragraph buried in four or five pages of terrorist disclosures.

 

[wood714]

My home insurance is too good. Few years ago a tornado went by pretty close to me. They found hail bruises on a few shingles and replaced my entire roof. It cost me $500.

I have $500 hurricane deductible too. Everyone I know around here has a percentage deductible on hurricane stuff.

My home insurance is most not cheap thou!

 

[Ivan the Butcher]

About 1970 a type of plastic pipe was used for the water line from the city main to your house. This had been a standard coverage until millions of them failed nationwide. Now you have to pay extra.

Similar problem with the gas connection to your house. This used to be a gas company problem until about 12 years ago! I heard adds on TV for special coverage for both @ 8.99 a month. I called my State Farm agent (Linda, not Jake) and ask if I was covered. She said I already had a special rider! How much is this costing me? $6.19 a year!

About 1988, State Farm dropped Volcano and Earthquake insurance as part of regular insurance in Ohio. Now requires a special rider @ $3.17 a year. The Condo Association covers the building now. So my condo insurance is for contents and liability, I have a rider to cover whatever the Association policy forgot! a little over $4 a year.

Like a good neighbor, State Farm is there,
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for a reasonable fee.

Ivan

 

[Tom S.]

What the OP described is pretty standard for the policies I've seen. Water pipe breaks - it covered but slow leak whether apparent or hidden is not. Storm rips open roof - water damage covered, roof leaks and causes damage over time - not covered. I discovered mold when renovating a bathroom after removing the shower wall and Allstate said "Too Bad".

 

[SMSgt]

Insurance . . .the great Ponzi scheme. I'm going through insurance hell now because of companies cancelling coverage here. Finally got new coverage but can't seek to get rid of the company who took over from my old company, all without any notification to me.

 

[Jeff423]

I don't think you really know for sure about your coverage until you file a claim. I'm dealing with this right now with dental insurance. They told me certain things were covered. Then I went to the Dentist's office. There I got a lot of "well's and maybe's, and under these conditions". (not from the dentist but from the insurance company). None of which was mentioned in the initial sales presentation. I'm afraid homeowners may be the same.

 

[Pisgah]

... the insurance company says it's my problem. Really? Any non-catastrophic pipe failure is not covered? What a damned racket.

Yes, really. The damage was not caused by any outside force, just improper plumbing and/or time. Same reason they won't replace your roof after 20 years just because it starts leaking, or a tire on your car just because it goes flat... stuff wears out.

 

[LVSteve]

Yes, really. The damage was not caused by any outside force, just improper plumbing and/or time. Same reason they won't replace your roof after 20 years just because it starts leaking, or a tire on your car just because it goes flat... stuff wears out.

With the build standard of the homes here it is quite likely that the job was botched from the git-go. Some may recall I had to get my attic insulated a few years back. Note that I didn't say re-insulated.

As for plumbing "wearing out" what's to wear out in a properly assembled plastic drain run not exposed to the Sun? I suppose the continual expansion and contraction of the home due to the Vegas climate could work a joint loose if the pipes were mounted in a particular way. Also, we have been shaken by some earthquakes over in SoCal. The last big one that hit the China Lake area shook the house pretty hard.

 

[SMSgt]

I don't think you really know for sure about your coverage until you file a claim. I'm dealing with this right now with dental insurance. They told me certain things were covered. Then I went to the Dentist's office. There I got a lot of "well's and maybe's, and under these conditions". (not from the dentist but from the insurance company). None of which was mentioned in the initial sales presentation. I'm afraid homeowners may be the same.

My latest HO insurance policy is 96 pages long. 96 pages. Three pages in and it dissolves into a quagmire of exceptions, exemptions, and endless "outs."

 

[444 Magnum]

All you vets should be with USAA. A true not-for-profit and excellent coverage. I've been a member for over 30 years. No regrets. My children are members now because of my initial membership.

 

[soFlaNative]

Would like to see companies that bundle home and auto but wont provide homeowners insurance in Florida barred from doing any business in the state. Not knowing the regs but curious about the dent it would leave.

 

[Alk8944]

READ your policy You will find that water damage is not excluded. The adjuster (not "leak man"), probably told you that your specific issue would not be covered as the damage does not exceed your deductible.

I retired from writing insurance in 2019 after being in the business since 1994!

 

[Nevada Ed]

There is frozen pipes, water heater burst, foundation shifts, sewer back ups
and other water damage types that you can cover.

The 80% coverage or a deductible clause are two other ways that you can get insurance.

After all these years, they have learned how to wiggle out of paying on
a lot of the clauses, if not 100% as written in the policy.

There are two other groups of people that I don't care for.
One meets you in the court house, the other in the hospital.

 

[rustythread]

When you buy insurance, you are making a bet that the amount of your insured losses will be greater than what the insurance cost you over time. The insurer--the one setting the house odds on the bet--is betting that they'll get more off you (including the return on investment of your premiums) than they will have to pay.
When a given line of insurance or type of coverage is not sufficiently profitable the company either adjusts the odds in its favor or calls "no dice" and quits selling it.
So long as the terms of the bet are decipherable from the policy, almost anything will get past the various state regulators.
Compounding the confusion is the general lack of ability to see an actual copy of the policy before you have paid for it. Many insurers forbid their sales agents from attempting to explain the details of the policy, because the company could be bound by an over-generous description.
Even if you trust the company or the sales agent implicitly, when you get the policy, READ THE DAMN' THING!!

 

[ameridaddy]

Everyone should check their roof coverage. Many companies are dropping replacement cost on the roof shingles once they reach 15 years of age. They tell you to replace the roof or they will put it on a cash value basis only.

The cash value of a 20 year roof is almost nill. Not every company is doing this, but several are. Check your policy or check with your agent if you have an aging roof. If the roof is newer, make sure the insurance company has that documented.

I have customers who learned this the hard way. Insurance company said they "notified them in the mail about the changes". I'm sure it was a paragraph buried in four or five pages of terrorist disclosures.

That's the practice and rule in Florida. If your roof is 15+ years old, you can't sell the house without reroofing, because it gives a potential buyer an out when the inspector reports back and they can't get homeowners' insurance.
This is the case because so many gypsies came to Florida after hurricanes and made a practice of going door-to-door offering to inspect roofs, then damaging the roof while up there and telling people they need a roof replacement and that their insurance company will replace the whole roof for free. Now insurance companies will not write a policy for a new owner unless the roof is less than 15 years old, even if it's a high quality 50 year dimensional shingle.

 

[austintexas]

storm damage

Latest thing to happen to me, We had a 2 day freezing rain and the accumulated Ice on the tree limbs broke the trees or limbs. I called my insurance and they told me , $2500 deductible over that they would pay. 2 weeks ago I got my renewal paper work and as I read over my coverage I found out that I'm covered for $1000 for brush removal. All I can say is my insurer needs to hire more knowledgeable help in his office.
SWCA 892
PS, I guess I should have read my policy before I called and not rely on his office help.

 

[LVSteve]

READ your policy You will find that water damage is not excluded. The adjuster (not "leak man"), probably told you that your specific issue would not be covered as the damage does not exceed your deductible.

I retired from writing insurance in 2019 after being in the business since 1994!

The message came from the adjuster lady after reading Mr Leak's report. They are sending me the official denial in the mail. I can appeal, but I'm getting stabbing pains in my wallet already.

 

[SMSgt]

All you vets should be with USAA. A true not-for-profit and excellent coverage. I've been a member for over 30 years. No regrets. My children are members now because of my initial membership.

I am, and I'll probably be dumping their auto insurance after they jacked my rates by 50%. Their reason? USAA wants out of the FL market. Good deal on my HO insurance though, but it remains to be seen what happens next year.