Home Owners Insurance Issue with Erie

[CFP83]

I am a financial advisor, that owns a couple rental houses....I do not do any type of P&C insurance as a part of my practice.

The properties that I own are insured through Erie Insurance. Just this past week we discovered a busted waterline in one of our rentals that was in between tenants...it was a mess. It looked like the water had been running for a few days or so. Anyway we discovered this issue Sunday night and I immediatly filed a claim online with Erie. On monday morning I was on the phone with an adjuster. They instructed me to call a restroration company to get the house dryed out. On tuesday and they gave authorization to the company to remove hardwood floors and kitchen cabinets because of damage. This morning the adjuster met me at the property to review the damage and total claim value. He told me that it was "large enough to be out of his ball-park" so another adjuster would be contacting me by this friday. An hour after he said this I got a call from him saying that they reviewed my coverage and that my policy only convered "damage caused by natural perils". In this instance he stated that the furnace quite working (the temperature here lately has been about 10 degrees) and then the pipes burst. He stated that the policy doesn't cover damage caused from pipes rupturing?

When I put the policy in force with my agent over two years ago i made two and only two request. First I wanted a $2500 deductable and secondly, their system was saying based upon "true replacement cost" i needed 200k of coverage on each home....well we only paid 60k for each of these houses. So it turn I stated I wanted a total of 100k of total converage on each house.

My question is this....I simply wanted 100k of coverage on each house and a 2500 deductable. How in the heck did we get a policy that wouldn't insure damage caused from a failed furnace and busted waterlines? Is this an error on my agents part? As of the last few hours the insurance companies stance is that they aren't liable....meanwhile there is probably going to be 20,000-25,000 of cost to replace all the damaged floors,cabinets,drywall, and cover the cost of the water restoration companies services. My stance is I'm not a P&C agent and rely on my agent to build a policy based on my two stated objectives.

I would love to hear any and all feedback from the forum

 

[IndyGreg]

Re: Home Owners Insurance Issue

Need more info? Did the adjuster say anything about property being vacant and for how long? Get policy out what form was it DP-3?

You also have insurance to value and co-insurance issues.

If I am correct Erie does not use standard ISO form policies?

Any Erie agents confirm this?

 

[Soaringagent]

Re: Home Owners Insurance Issue

Sorry to hear that. How did you leave it with the claims adjustor? What did the agent say?

 

[avaloninsurance]

Re: Home Owners Insurance Issue

Uh oh. Sounds like you maybe have a Dwelling Fire Policy Form I??? This is the most basic of policy forms and more than likely would not cover the damage that you described. Sad that an agent could possibly write that type of policy, without at least reviewing the coverage and having you sign off on the coverages. Lesson learned.....ALWAYS ready your policy jacket OR schedule an appointment with your agent to review the policy jacket when you purchase a policy. Hope everything turns out okay for you. I would recommend getting an independent adjuster involved.

 

[Aram Fingal]

Re: Home Owners Insurance Issue

It's possible that this had to be done so that they could give him a policy with the reduced coverage he was asking for. Most companies won't issue a special form, replacement cost policy on a house unless you're insuring it for the full replacement cost. In fact, in a lot of cases, on a normal policy if you're insured for less than 80% of the true replacement cost the policy is void.

So I suspect that the reason it was this type of policy was to allow the agent to write it at the reduced coverage amount that CFP83 requested.

Uh oh. Sounds like you maybe have a Dwelling Fire Policy Form I??? This is the most basic of policy forms and more than likely would not cover the damage that you described. Sad that an agent could possibly write that type of policy, without at least reviewing the coverage and having you sign off on the coverages.

 

[kylewhite214]

Re: Home Owners Insurance Issue

I am a financial advisor, that owns a couple rental houses....I do not do any type of P&C insurance as a part of my practice.

The properties that I own are insured through Erie Insurance. Just this past week we discovered a busted waterline in one of our rentals that was in between tenants...it was a mess. It looked like the water had been running for a few days or so. Anyway we discovered this issue Sunday night and I immediatly filed a claim online with Erie. On monday morning I was on the phone with an adjuster. They instructed me to call a restroration company to get the house dryed out. On tuesday and they gave authorization to the company to remove hardwood floors and kitchen cabinets because of damage. This morning the adjuster met me at the property to review the damage and total claim value. He told me that it was "large enough to be out of his ball-park" so another adjuster would be contacting me by this friday. An hour after he said this I got a call from him saying that they reviewed my coverage and that my policy only convered "damage caused by natural perils". In this instance he stated that the furnace quite working (the temperature here lately has been about 10 degrees) and then the pipes burst. He stated that the policy doesn't cover damage caused from pipes rupturing?

When I put the policy in force with my agent over two years ago i made two and only two request. First I wanted a $2500 deductable and secondly, their system was saying based upon "true replacement cost" i needed 200k of coverage on each home....well we only paid 60k for each of these houses. So it turn I stated I wanted a total of 100k of total converage on each house.

My question is this....I simply wanted 100k of coverage on each house and a 2500 deductable. How in the heck did we get a policy that wouldn't insure damage caused from a failed furnace and busted waterlines? Is this an error on my agents part? As of the last few hours the insurance companies stance is that they aren't liable....meanwhile there is probably going to be 20,000-25,000 of cost to replace all the damaged floors,cabinets,drywall, and cover the cost of the water restoration companies services. My stance is I'm not a P&C agent and rely on my agent to build a policy based on my two stated objectives.

I would love to hear any and all feedback from the forum

Have you asked an insurance expert for this? I think it would really help. An insurance professional with state specific knowledge and experience about insurance I think can really be a big help.

---------
California Casualty

 

[fish69]

I'd have to agree with "Super Genius"---all the carriers we represent (Independent agent-Illinois), will not allow a DP-2 or DP-3 to be written if structural coverage is less than 80% of estimated "Repacement Cost".

The DP-1 would not cover this type of loss, in my opinion.

 

[cottonland]

If the coverage is not written on a special cause of loss form, the water damage is not covered unless there is other visible damage to roof or walls. If Eerie has their own forms, then that could change things. What form was the policy written on?