One of the most difficult things we face as brokers is when a client calls us for help with a situation or perceived emergency, and we have to tell them something is not covered.
In life, we all like to know that someone has our back. When something goes wrong there's someone there to help us.
Your insurance policy becomes that "someone" when something sudden and accidental happens to your home, car or other insured property.
When you deal with a broker, the expectation to have someone who will be responsive and help is even higher. You are not only dealing with an insurance company, you're dealing with a trusted advisor, someone who has the experience to know how to help you when you have an emergency. Unfortunately, in some cases, like when dealing with rot or mold, or the natural deterioration that takes place over time, even your insurance will not respond.
You call your representative, you've suddenly become aware of a horrible problem - mold in the walls, or rot under the floor...you think you will have some support - but brokers aren't miracle workers. All we can do is advise you what your policy covers. In any policy that I know of, rot and mold is not covered.
Rot and Mold fall under exclusions in your policy wording.
There are references in most insurance contracts to items that are not insured. The nature of insurance is to protect you from sudden and accidental loss. If you think about the length of time it takes for rot and mold to take hold, neither of these things are sudden and although they may result from an accident, in the majority of cases, with few exceptions, they result from unattended repair over time. Most policies contain an exclusion that reads somewhat like this:
"We do not insure water damage caused by continuous or repeated discharge or overflow of water whether the insured was aware of such discharge or not"
"We do not insure gradual damage caused by wear and tear, gradual deterioration, rust, corrosion, dampness, wet or dry rot, fungi or spores OR repeated damage to property."
It's a tall list of things that can go wrong and not be covered, but these are all important considerations for any homeowner. (Note that this is but two areas of a long list of exclusions on all homeowner policies - it is important to find out what your contract lists specifically).
What can you do to protect yourself?
In every case I have ever handled where we see instances of Rot and Mold, two things happen.
1. The homeowner is shocked and distressed, suddenly hit with overwhelming cost, and the surprise that its not insurable. They can not believe the level of damage hidden in the walls or floors. They usually don't feel they had any indication of the nature of the problem.
2. We usually send people in to investigate the loss - its part of the process in making a claim. When we look at pictures taken during this investigation, we usually clearly see the signs were there. Yet individuals did not ever notice them. I think it is because in the busy lives we lead, we just don't have the time to focus in on these things, we hear a drip, we don't imagine its destroying our outer walls, or our floors. We just think it's a drip. We, as individuals need to start paying closer attention.
What can you do?
It's all in the details, become aware of what is going on in your home. Realize that anything out of the ordinary can point to something serious. Stop things in their tracks while they are still small problems. You never know what is lurking underneath the surface.
Some water damage advice to help control or prevent rot or mold:
- If an area is damp, make sure you install proper ventilation. Try and determine why the area is damp, think about the effects that continuous dampness could have and be proactive. Money is tight everywhere, no one wants to take on added expense, but in reality the long term effects of not responding to situations like these are far costlier on all levels and also can put your health and safety at risk. Monitor the humidity levels in your home, between 30% and 50% is a fair range.
- When materials in your home start to change color, or wood or paint start to buckle - this is not just something that's happening for no reason. Water is often the cause.
- If you have water damage, attend to fixing the source of the problem quickly. According to the Insurance Bureau of Canada, some types of mold can grow in as little as 24 hours.
- If you see damage somewhere that doesn't seem to be remotely associated with a source of water - don't disregard this - be concerned. Investigate what is happening before damage starts to spread. If you catch something right away, it might be covered by your insurance because it will never get to the point of being repeated, or gradual. Seek professional advice.
- When you are purchasing a new home, make sure that you hire a qualified and experienced building inspector to take humidity tests of the walls at the property. We have seen several cases first hand where inspectors simply did not investigate far enough and people who have purchased new homes end up with massive reconstructions due to hidden rot and mold issues. This is the worst kind of case, when the person affected wasn't even in a position to know about the issues, and yet they get stuck with the bill. I have a client right now who is one year into the repair work and paying thousands of dollars in insurance simply because they did not detect the problem prior to purchase. Their inspector let them down, but they are the ones stuck with the bill. Invest in a thorough home inspection, I can not tell you enough how important it is to uncover things before you make your purchase.
This is the best we can do for you as brokers on this issue: offer you advice, explain what your policy covers or excludes and try and help you be proactive in prevention. Anything beyond that is outside our mandate and ability.
When there is an injustice on the insurance company's side - we will go to bat for you. If you need help settling a claim, and you need someone on your side - that's what we are here for. We do what we can within the limits of coverage of the insurance contract. Unfortunately, on the issue of things that are not covered even with the best broker, you will not be able to receive coverage for something that is excluded from the contract.
Working together to be proactive, that's the best advice we can give. With water damages on the rise, I am sure we have all heard of issues, what has your experience been?
What about those of you who have had a claim denied, did you think your broker let you down when they had to explain the insurer denying a claim?