Frozen pipes and water damage

February 12, 2016 by  
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Freezing cold weather can cause damage by freezing the water in your pipes, resulting in leaks.

Your Obligations

Most insurance policies will pay for water damage caused by frozen pipes as well as pipe repair and the cost to tear out and replace necessary elements to access the pipes. But there are also many requirements to be covered for such loss. If the building is vacant, unoccupied or under construction an insured is required to do their best to maintain heat in the building or to completely drain the plumbing. Automatic oil delivery is one way to demonstrate that you are doing your best to maintain heat with an oil furnace.  It is necessary to have regular service of any heating system. Having a service contract can fulfill a portion of your obligation. If the plumbing is to be drained, be sure to have it done professionally so you can prove it. If you must undertake it yourself, use a compressor to blow air through the lines after draining to eliminate low spots where water can accumulate.   Shut off all toilets, flushed and anti-freeze put in both the tank and the bowl. Pour antifreeze into all other drains.

Thawing Pipes

Sometimes the best efforts will not stop plumbing from freezing. Pipes that are next to exterior walls are more susceptible to freezing. Buildings with poor insulation stand a greater chance that the interior might be warm, but a basement pipe may freeze. Often a frozen pipe will not leak until it actually thaws, as the frozen ice is a block to the water escaping. Sometimes pipes can freeze without damage. In such cases you can thaw the pipe with a hair dryer. But avoid heat guns and torches which commonly cause fires when attempting to thaw pipes. You might also warm the pipe with an electric blanket, or towels soaked with hot water.

Avoidance

Some things you can do to avoid frozen plumbing (especially if it has occurred previously):  Keep cabinet doors under sinks open so that the room air can heat the space. Or open faucets just slightly to create a drip. Just like running streams do not usually freeze, the water moving in pipes may prevent the line from freezing. If there are pipe runs in an unheated or poorly heated basement, you can insulate them, but that is not always effective. It is more effective to be sure there is insulation in the basement, especially if there is any open framing on an exterior wall. There is often space between the top of a masonry foundation and the floor above it, and the exterior walls of that space need to be insulated.

Cleanup

If all else fails you may still have water damage from frozen plumbing, heating, air conditioning, or appliance. Immediately notify your insurance company and hire a mitigation company to come to pump out water and to dry the premises. Take plenty of photos to demonstrate the damage as it occurred. Do NOT throw damaged items away, as an insurance company has the right to inspect them before payment. Feel free to call us if you need advice or assistance with your claim.

For more information about water damage see Water and Mold.

Bob D’Amore among recipients of Governor’s plaque

May 4, 2015 by  
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Bob D’Amore, president of the New York Public Adjusters Association, Ron Papa, past president, and Jonathan Wilkofsky, general counsel, were each recently honored with presentation of a plaque in recognition of their assistance in establishing a new law that broadened the rights of consumers expanding the appraisal provision found in all property policies. The plaques were signed by Governor Cuomo and Secretary Mulrow and each also contained a pen used by the Governor to sign the law. Consumers can now be assured that not only can they demand a non-litigating solution to an unresolved difference in the value of their claim but also the extent of damage.

See also Court Ruling Affirms That Scope Of Loss Is Appraisable
 

Ice dam and snow coverage explained

January 26, 2015 by  
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What Is An Ice Dam?

An ice dam forms when warm air from a house circulating under the roof melts snow on top.  A thick layer of snow traps air and acts like insulation.  This allows the surface of the roof to warm to the point that it melts the snow.  As the water flows down the roof it reaches the edge (overhang) which is colder than the rest of the roof because there is no heat under it.  The water then re-freezes at the edge of the roof.  More water coming down the roof flows over it, building up more and more ice.  Eventually this ice forms a dam which traps the liquid water on the uphill side of it.  Water then rises to the point that it flows under the shingles, entering the house and causing water damage.  The only way to stop this damage once it has begun is to remove the thick layer of ice, which is often extremely difficult.

In many snow belt areas,  homeowners can install electric warmers under the edge of the roof.  Metal edging is sometimes used to allow any ice build up to slide off the roof (the rough texture of roof shingles holds ice in place.)   Quick removal of snow from the lower section of a roof can usually minimize ice dams.  Be sure to drag the snow down the roof rather than trying to shovel upwards, as a shovel will often catch a roof shingle and tear it off!  Hardware stores and mail order houses often carry a special telescoping tool to remove roof snow; it looks something like a big rake without teeth.

Snow & Ice Coverage

Most business and homeowner policies cover weight of ice and snow that causes damage. Check the policy to be sure.  The following is a discussion of a common problem after large snowstorms.

The most common form of policy is the HO3 policy form.  Direct writing insurance companies like State Farm, Nationwide and Allstate use their own version of this common policy, usually called “deluxe”.  It covers all risks of physical loss to the dwelling and other structures on your property except those specifically excluded.  This policy covers ice dam water damage to building components only.  If you have an HO2 policy form or the less expensive direct write policy (often called “standard”), there is usually no coverage for ice dam claims.  Under most homeowner forms, contents (personal property) are not covered for water damage from snow or rain unless the exterior of the building is first damaged by the force of wind or there is a complete or partial collapse of the roof and water enters through such opening.  Carpet installed over finished flooring is usually considered contents, not a building component.  Of course drywall, plaster, paint, wallpaper, wood floors, electrical fixtures, etc. are considered building items.

See also How To Get Rid Of House Dams – This Old House

New Insurance Bill on Appraisal signed by Governor Cuomo

June 28, 2014 by  
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In the waning days of the spring session of the NY legislature, both the Assembly and Senate unanimously passed a bill that requires ALL insurers in NY not only to honor the formal appraisal clause found in every property policy, but also to include “the extent of damage” meaning the scope of the loss.  While appraisal will not decide issues of whether or not a loss is covered, it can be an inexpensive way to settle a disputed claim without hiring an attorney or waiting years for a court case to be heard.  

For more information on the appraisal process, see Alternate Resolution.

See also Court Ruling Affirms That Scope Of Loss Is Appraisable

Insurance valuation explained

October 23, 2012 by  
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Actual Cash Value vs. Replacement Cost

If your policy provides replacement cost for your property policy for building and personal property, it can make a substantial difference in the ultimate settlement that you are awarded by your insurance company.  Most homeowner policies provide replacement cost coverage on the dwelling itself and attached structures, such as a garage.  Personal property coverage may be written at Actual Cash Value (ACV) or Replacement Cost (RC).  Some very high end expensive policies will provide for the full cost of repair or replacement without having to actually repair or replace, but most commercial and homeowner policies require repair or replacement to be complete before providing replacement cost benefits.  Some commercial polices and homeowner “floaters” will have different valuation provisions such as original cost or a value that is agreed up front.

Holdback

Under most replacement cost policies, insurance companies will hold back money that is agreed in advance until you can prove you have spent your claim money for the full replacement cost of your loss including the policy deductible.  The amount paid up front is called “Actual Cash Value”, which should be what something is worth prior to the loss considering depreciation, obsolescence, condition, etc.  The difference between RC and ACV is often called a “holdback”.  The claim for this holdback is made after receiving the ACV settlement and on buildings it is usually done after the building is substantially complete.  Personal or business contents replacement cost benefits are usually claimed in batches as items are replaced.

Case Law

But what does the actual cash value of your loss mean and how can you or your public adjuster deal with a company adjuster who may be overly aggressive applying depreciation or holdback to your claim payment? First, look for the definition of “Actual Cash Value” in your insurance policy. Our experience has been that most property policies do not define the term “Actual Cash Value,”  “Depreciation” or “Holdback.” If it’s not defined, then case law (prior decided court cases) have held that all factors influencing the value of something must be considered, such as replacement cost, fair market value, depreciation, condition, etc., however, the courts have held that not all of the factors must be weighed equally.

Formulas

Insurance companies will often teach a simple mathematical formula to determine depreciation. These are based on some in-house life expectancy tables that are at best subjective.  They divide the age of an item by its purported life expectancy. This percentage is applied against the replacement cost of an item. Many would argue the fairness of this method depends on whose life expectancy tables are being used. This method certainly does not take into consideration usage or the care one owner may take versus another.  One particular example comes to mind of  a retired couple who had a living room with snow white carpeting and furniture that was covered in plastic.  Although it was over 30 years old it still remained in pristine condition due to the fact that no one was ever allowed to set foot in that room.  One would expect a household with many family members and pets to likely have more wear and tear on personal property and structure than a retired couple or a single person having the same home and contents purchased within a similar time period. This same concept applies to building losses. A well maintained building with scheduled maintenance and repairs performed as required should not be subjected to the same standards as a home that has several years of deferred maintenance and failing systems.

Conclusion

Every dollar that is reduced in depreciation/holdback is a dollar in your pocket.  Especially if you do not plan to replace every item you lose.  If all your clothes are burned, they probably include many items that you don’t wear or don’t need.  If you have duplicate or triplicate items, you are likely to replace only one of them.  Now that you know the rules you should know that the fair amount of depreciation to be taken can be subjective and subject to negotiations.  A good public adjuster is ready to fight to get you the maximum settlement possible with the least amount of holdback applied.

Liberty Mutual customers beware!

June 15, 2012 by  
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It has come to our attention that many, if not all, Liberty Mutual homeowner policies have a new endorsement that seriously limits your recovery for personal property. This endorsement supersedes any other language in the policy, even the “deluxe” policy. It limits potential recovery to a maximum of $2,500 for loss to all the following categories of property:  $2500 in the aggregate for loss of any of the following whether or not they are part of a collection: trading cards, comic books, figurines, stamps, advertising materials, stuffed animals, dolls, sports and entertainment memorabilia, toys, games, militaria, and books” This means the limit applies to any combination of loss to these categories of property. To our knowledge no other company has such restrictive coverage in their homeowner policies. Most families have much more at stake for these categories of property. We recommend that you examine your COMPLETE policy for this endorsement or if you only have the declarations page, look for “Ammendatory Endorsement FMHO2810”. We highly recommend changing insurance companies if you find this endorsement applies to your policy and would negatively affect you in the event of a loss. Note that you can change companies even in the middle of a policy period and receive a pro-rata refund for the unused time period of your current policy.