Why Freeze Damage Occurs
Freeze damages occur because the water inside of your pipes freezes. The ice that forms in the pipes increases the pressure inside the piping. When the pressure finds a weak-point within the pipes, it bursts and water is released into the surrounding areas.
If the damage is substantial enough, you may need to make an insurance claim for your damages.
You pay for property insurance so that you are protected from financial loss if sudden and incidental damages occur to your property. Therefore, full compensation for your damages is essential to the claims process, because that will enable you to return your property to how it was before the loss event.
Why Claims Get Underpaid
Adjusters hired by your insurance company are incentivized to under-estimate your damages. They are under intense time-pressure from their employers to close claims quickly for “undisputed” claim amounts, which is code for the least amount of money possible.
Second, water can cause a tremendous amount of damage that is extremely subtle or hidden from plain sight. As a result, the homeowner either does not observe or does not have someone on their side who can advocate for them to address the damages.
Third, the claims process is complicated and many homeowners are intimidated by it.
The path to a fair claim settlement is often a long, winding, unfamiliar road that is very stressful to travel alone. You must navigate through many dizzying steps — all of which are laced with obstacles and traps that could jeopardize your claim at any moment. A mistake at any of these junctures could lead to underpayment or even denials.
As a result, most water damage claims get severely underpaid, the homeowner doesn’t get enough money to fully repair their home, and the insurance company keeps the extra monies for themselves.
How Insurance Companies Underpay Claims
Unfortunately, each insurance company has designed processes designed to underpay claims.
Here are some examples:
Estimating guidelines that don’t allow detaching and resetting light fixtures to facilitate painting.
Paying for damaged base cabinets, but not matching upper cabinets.
Forcing homeowners to use “company-approved” contractors who do the work for a fraction of what its worth.
Over-depreciating damaged building materials or personal property items to reduce the claim payout.
In this guide, you will learn how we help our clients maximize their freeze damage claims so they can get paid what they deserve.
How to Maximize Your Claim
- Hire a knowledgeable insurance restoration estimator or builder to prepare an Xactimate estimate of the damages to your home or business that can be presented to the insurance company. When the estimate is prepared, request an electrical check if any of the circuits in your home were touched by water. This means any electrical outlets, light fixtures, appliances. If any HVAC equipment such as a boiler or furnace were affected by water, request an allowance for an inspection to determine if any damage is present.
- Hire a reputable water damage restoration company to mitigation your water damages. The insurer will pay them directly if you have coverage. If you don’t have coverage the restoration company will likely work with you on their fee.
- If many personal property items sustained damaged during the loss, hire a contents inventory specialist to itemize and appraise your damaged personal property.
- Don’t allow the insurance company to take an unjustifiable amount of depreciation from your settlement check(s). Adjusters use arbitrary methods to determine depreciation. Make sure the amount of depreciation taken is fair and based on sound reasoning.
- If you do not have a functional kitchen or bathroom in your home after a loss event, you are entitled to additional living expenses while repairs are performed. If the home is not safe to occupy, you are also entitled to additional living expenses. ALE covers any additional amounts you pay above any beyond your normal spending habits. If you stay at a hotel, those additional expense are reimbursed. If you must eat-out, the extra amount spent above your normal food expenses will be reimbursed.
- Request copies of the adjuster’s estimates before the issue a check. When you receive the adjuster’s estimate, review it with your contractor (see #1).
- If pipes freeze in your home, the cost to replace the frozen pipes is generally covered by your policy — so make sure your plumber gives you invoices for any work performed. If the pipes are not covered, the insurance company owes for “access” to the pipes. In that case, you will need an itemized invoice from your plumber. The itemized invoice will distinguish between the amount paid for materials and changing the pipes versus any labor to “access” the pipes such can breaking through drywall, removing plumbing fixtures, or operating in tight spaces.
- Take photographs of all damaged property and do not discard property before the damage is properly documented by the adjuster. When taking photographs, make sure you take perspective and close-up photos.
- Keep records of everything. The insurance adjuster will want your heat records for the past 1-2 years to verify that heat was maintained in the building at the time of loss. Acquiring this information before the adjuster asks for it will expedite the claims process.
Following these steps will help you maximize your claim.
If you need further assistance at any point during the claims process, please contact us to get a free, no obligation claim consultation with a licensed public adjuster.