Help deciding if claim is worth it?

[BenGA]

Apologies in advance for long winded question. Had some bad luck and trying to decide if I should file a claim, and unfortunately calling my agent and the insurance direct line (Encompass) has left me even more confused since they contradicted each other.

Noticed some staining on bedroom wall day after Thanksgiving. Long story short, we had a slow leak caused by HVAC condensation pipe, presumably due to siding nail hitting it during construction and finally rusted enough to let water out (home built in 2014). Found signs of growth, so we called water mitigation company. When they left, I noticed the OSB sheathing seemed wetter and more rotted on the far edge of where they cut drywall. Not sure if they didn't notice or didn't care, but when I cut more drywall and investigated I found a SECOND leak 5 feet away from first, this one caused by a perfect storm of circumstances allowing rainwater to enter the house via a nail securing flashing where our siding meets the brick skirt. No growth on this one, but the OSB was rotted.

The day I discovered the initial leak, I called the insurance main line. He said to fix it and save receipts for claim. So I got ball rolling with mitigation. The following Monday I called the agent (first day they were open), and she said I first have to have an appraiser, but once I get that ball rolling I would lose my "no claim discount" regardless if I ended up proceeding with a claim. So I took a gamble and decided to proceed on my own, to keep my premium intact. But the repair bills are turning out to be higher than I expected so now I'm second guessing. Here's what I'm out so far:

HVAC leak repair: $200
Siding leak repair: $350
Mold mitigation: $300
Repair (quoted): $2000

So now I'm getting on the edge of wondering if I should file a claim, but it might be too late at this point. But what's bothering me is:

1) Is it too late?
2) Does my premium get extra punishment due to it being water related?
3) Is the nature of damage even covered under normal home-owners insurance?
4) Is the $550 spent stopping the leak part of the claim or out of pocket regardless?

I'm just trying to do the "math" here to see if it's worth a gamble of calling insurance back to see if I can try the claim, or just suck it up and pay the ~$3000. I'm just really frustrated, since as usual I feel like my insurance is an adversary complicating an already frustrating situation, vs being a safety net ready to help me out. Probably not the best thing to say on this forum, but I just hate being scared to use the insurance I'm paying for. I guess really it's there for the big things and I probably just need to keep stuff like this out of the picture? I just love how I'm told things like "a claim like this won't make your premium go up" but then they say "you will lose your no claim discount", as if there is a difference for all intents and purposes?

I'm also worried the appraiser would come out, say it's not covered, but them still raise my rates since I kicked off the process in the first place.

Sorry for the whining, just had a string of bad luck this year with both my car and home, and despite having insurance, I've chickened out from making claims on any of it, save for my wife's windshield since I was assured that wouldn't make my rates go up.

Thanks in advance for any help or advice on this. I'm guessing I just need to stick to out of pocket but wanted to ask just in case.

 

[fed up]

what is your homeowners premium? What is your deductible?. If the total cost is under $3000 and that amount isn't going to break the bank look at it this way. You pay the deductible before the first insurance dollar gets paid, let's say $500. Your premium will increase over the next 3-5 years through the loss of a claim free discount and the claim itself. If your premium is $1000 the deductible and increase in premium for 3-5 years may not be worth the bother of filing a claim. No agent will say "Don't file a claim" nor will they say "File a claim". It is your wallet. Add that to the fact that your claim may be converted to 2 claims because of the found damage from a different problem and it is twice the deductible

 

[BenGA]

what is your homeowners premium? What is your deductible?. If the total cost is under $3000 and that amount isn't going to break the bank look at it this way. You pay the deductible before the first insurance dollar gets paid, let's say $500. Your premium will increase over the next 3-5 years through the loss of a claim free discount and the claim itself. If your premium is $1000 the deductible and increase in premium for 3-5 years may not be worth the bother of filing a claim. No agent will say "Don't file a claim" nor will they say "File a claim". It is your wallet. Add that to the fact that your claim may be converted to 2 claims because of the found damage from a different problem and it is twice the deductible

Meant to specify my deductible but forgot... it's $1000. My premium is about $1800. I didn't even think about getting charged the deductible twice, thanks for pointing that out. The idea of that adds insult to injury, but is definitely a good reason to avoid making a claim.

 

[adjusterjack]

Add that to the fact that your claim may be converted to 2 claims because of the found damage from a different problem and it is twice the deductible

Yep, that's common practice and I do see two separate claims there.

By the way, did you ask for $1000 deductible when you bought the policy or did you just accept the policy with the $1000 deductible because that's the way it came, or did you not know that you had a $1000 deductible until this water damage?

 

[BenGA]

Yep, that's common practice and I do see two separate claims there.

By the way, did you ask for $1000 deductible when you bought the policy or did you just accept the policy with the $1000 deductible because that's the way it came, or did you not know that you had a $1000 deductible until this water damage?

I knew I had it, it was a while ago now but I think my thinking was it would keep the premium lower. Honestly paying that doesn't bother me (though paying twice at once for the same 5 feet of wall does!), I'm more worried about impacts to premium from making a claim.

 

[adjusterjack]

When your renewal rolls around have your policy quoted with a $500 and a $1000. Don't assume that there is a big savings. There might not be.

As for claims, well, water damage claims become an underwriting issue. Especially two. There could be more coming.

 

[BenGA]

As for claims, well, water damage claims become an underwriting issue. Especially two. There could be more coming.

Now you’re scaring me… that just a concern about making a claim or a bigger one about my house? As far as can tell the issues are isolated (HVAC lines are abandoned now. For second I checked around the house and no other spots appear to have the same issue).

 

[Valor]

You've received good advice. I would suggest looking into your policy regarding what isn't covered. I think that "poor construction" isn't covered and the nail piercing the HVAC pipe and a nail securing flashing where the siding meets the brick skirt would both probably be considered "poor construction".

Whenever there is some ambiguity or a claim could go either way, I will call one of our company adjusters and discuss a situation to help get more insight to make or not make a claim.

How long has it been since you noticed the initial damage? There is a time element when making a claim.

Find out how much the "Claims-Free" discount really is. Your agent should know it or find out how much it is. Not all discounts are created equal. It could be a small discount like 2 to 5% and it could also be a significant discount too...but at least you will know what that amount is. Typically those discounts don't fall off until your upcoming renewal, but again, ask your agent about this.

Let's say both claims you made were paid, what would the surcharges be, upon your upcoming renewal?

If you made these two claims, is it possible that your insurer could non-renew your policy?

Let's say both claims were denied, would there be a surcharge? If so, would they be the same as if the claims were paid out?

Again, if you made both claims but they were both denied or let's say one was accepted but the other was denied, is it possible that your insurer could non-renew your policy?

It Becomes A Challenge To Find A New Home Insurer If Your Policy Has Been Non-Renewed, especially when it is due to claims. Not only is it a challenge but your rate can increase quite a bit compared to what you are currently paying and the coverage tends to be less than what you had.

How long does the surcharge last?

Does the surcharge amount reduce some each year until it finally falls off?

As an agent, I get as much info as I can and let my insured know the potential pros & cons and let him or her make that decision to make a claim or not.

I wish you well.

 

[BenGA]

Thanks. Yeah, it's good advice and I decided yesterday not to make a claim. I'm just getting more worried now that terms like "poor construction", "underwriting issues", "non-renewed", etc. have come into play. May just be my unfamiliarity with the business making the terms sound scarier, but now I'm worried if I'm statistically likely to have more issues with my house, and scared I'll lose my insurance if I make any claims in the future. Is non-renewal a fairly common thing?

Honestly, I've always considered my home to be well constructed and made sure to have an inspection before purchasing, but I guess there's never any way to know for sure. I do know the second leak needed a bunch of holes in the swiss cheese lining up just right to result in intrusion, so I'm really hoping that means it's isolated. I've tried to examine the rest of the house to be sure and so far haven't found anything.

As far as asking my agent about how much the no claim discount is, I asked that earlier and she didn't know. Unfortunately, the original owner of the agency is no longer with them, and the other person I always end up talking to never seems sure of the answers. I'm considering looking elsewhere for auto/home insurance before much longer; there's a lot of security in being able to talk to someone knowledgeable when you need help.

Regarding timeline, I called insurance and mitigation company the same day I found the damage.

Thanks again all for the help.

 

[scagnt83]

You need to contact the contractor who built the house. These are construction mistakes, which the contractor who built the house is legally liable for.

GA has an 8 year window to bring litigation against a contractor. So you need to act asap to do so!

This should fall under small claims court, so I would make sure to file before the 8 year limit hits. Even if you just want to settle, file to meet the deadline. It also shows the contractor how serious you are.

So before you do anything else insurance related, contact the contractor. Call them and send a letter via certified mail. If they are reputable, they likely will just send a crew out to repair it all.

IF you have to actually go to court, it would not be hard to prove that these were construction mistakes, especially the nail issue. You could hire another contractor, or an actual forensic engineer ($200/h-$400/h), to do a write up of the issue and how it was caused.

But no contractor wants to go to small claims court if they can help it. Which is why they will likely come repair the issue if you inform them of it and that you "intend to pursue all legal remedies if not fixed asap".

There are lawyers who specialize in this field, but I doubt you would need to go through that expense for this. You hiring an expert and showing their report to the judge would be plenty sufficient most likely. But since this isnt a huge fix, most reputable contractors are going to just send a crew out to fix it.

(I have a close relative who is a forensic engineer, so I am very familiar with this stuff and this happens all the time)