Type of policy I Homeowner
City I Alisa Viejo, CA
Description of loss I Two story house sustained water damage result of leaking cold copper pipe between 1st and 2nd floor.
Insurance Adjustment Summary I
- Insurance company’s initial settlement after applying deductible & depreciation in amount of $-2,166.37; Adjuster’s estimate was $2,833.63 and deducible was $5,000.00.
- Supplemental claim settlement in amount of $23,931.89; before applying deductible & depreciation.
In December 2012, a two-story house located near Irvine, California was flooded. The water pipe installed inside the first floor ceiling had ruptured and the leak damaged the ceiling and the surface of the wall, as well as the nearby high grade engineered wood flooring.
The elderly homeowners, Mr. and Mrs. K who are in their 70s, called the plumber immediately after discovering the damage. The plumber then cut the ceiling and the wall where the leak came from and then repaired the leaking copper pipe. Soon after, Mr. K tried to call the insurance agent to report the damage, but he only got the answering machine. Mr. K then left an urgent message letting the agent know about the ruptured pipes and flooding. Mr. K attempted to contact the insurance agent continually, but could not reach the agent.
Apart from attempting to call the agent, Mr. K was determined not to leave the site wet, so he opened all the windows and tried to dry the flooded site by turning on an electric fan. Concerned that the site would not dry well since they only had one fan, they even borrowed fans from family and friends who lived far away.
What it is like to live in Irvine, California with open windows in December will have to be left to the reader’s imagination. Three months after living with these fans on, a new insurance agent contacted Mr. K.
Surprised already by the appearance of this new insurance agent, Mr. K was stunned further as the old insurance agent did not convey the information about the flood to the new agent. Mr. K thought the flood damage was already reported to the insurance company by leaving the message to his existing agent at the time of discovering the flood. Eventually, Mr. K filed a claim and the insurance company notified him that they would not compensate him at all for the following reasons:
- About $3,000 will be paid for the costs of restoration of the dismantled wall.
- The floor damage caused by flooding will not be compensated. The reason being that the policyholder did not fulfill his obligations to prevent additional damage specified in the insurance contract, therefore the site seemed to be getting worse (this part is called into question, stating that the policyholder didn’t report to the insurance company immediately after finding the flood and the professional contractor did not maintain the site systematically).
- The deductible amount was $5,000, so the insurance company has no compensation for Mr. K.
The situation that Mr. K dreaded had eventually occurred. Mr. K was unable to receive compensation from the insurance company due to the negligence of his previous insurance agent, who did not answer Mr. K’s calls. This is the story before I accepted this case in mid-April. The following points state the client’s position that Mr. K conveyed to the insurance company.
- As the insurance company pointed out, Mr. K should check properly whether the claim was received or not. However, he spoke little English and did not understand the insurance claim adjustment procedures at all. He therefore tried to solve this situation through the insurance agent who could speak his native language other than English. Please note that Mr. K attempted to call the insurance agent of the insurance company dozens of times in order to report the damage and he even left messages. Due to the negligence and insincerity of the insurance agent, the claim had not been reported to the insurance company.
- The insurance company insists that Mr. K neglected the take “insured’s duties after the loss such as remediating the loss from further damage”, however, Mr. K called the plumber right after finding the flood and took the appropriate action. K seemed to do his best to prevent the situation from worsening by using fans and living with the windows open, even on a rainy days during the cold season.
The insurance company thought that my points above were reasonable and paid the compensation of about $18,000.00 to Mr. K for floor repair costs about a month later, and this case was concluded. On behalf of Mr. and Mrs. K, I would like to thank the staff from the insurance company’s claim unit who understood Mr. and Mrs. K’s distressing situation, as they have been long-time customers of the insurance company.
In addition, I would like to conclude this column by conveying my appreciation to the state government which empowered me to help the elderly couple who were experiencing such difficulties.