As I write this email, the disaster in Texas due to hurricane Harvey continues to unfold. It is causing major devastation, the impact of which will be felt for years to come. I recently spoke to a client of mine who has over 30 years of experience in the property and casualty adjusting arena. He shared with me some important initial steps that homeowners in any sort of disaster should immediately enact.
Once there is damage to your property, you need to file a claim with your homeowner’s insurance carrier immediately. Unless your homeowner’s policy has the additional endorsement or rider for flood insurance, all damages caused by ground water or a flood will not be covered; however, you need the denial letter from the insurance carrier specifying what is denied to then open a claim with FEMA.
Here’s where it gets technical. There can be multiple causes of water damage to a property in an event such as what is happening in the Houston area right now. Water coming through the roof that causes structural damage in the ceiling will be covered through the typical homeowner’s insurance policy under one of the common perils, such as wind. Wind damage to shingles allows rain water to get through the roof and cause damage. In a two-story home with water damage in the upstairs due to leaks in the roof caused by wind damage, and flooding on the first floor caused by ground water rushing in, the insurance company will deny much of the damage caused on the first floor but cover the damage on the second floor.
This leads into the conundrum of where the line is drawn for the damage due to mold. When it comes to mold, you need to read your policy very carefully and pay close attention to any new exclusions or exceptions that have been issued in the policy, particularly on your last two renewals, as to what is or is not covered regarding mold.
Most homeowners don’t realize that much of the language in their homeowner’s policy today relative to mold is a result of problems that originated in Houston, Texas thirty years ago in litigation that resulted in placing costs on insurance carriers that they had not anticipated.
There will be thousands of people in the Houston, Texas area and elsewhere that are going to be unable to locate a copy of their insurance policy, and for good reason. All the interior contents of their home or apartment have been lost due to water damage. In this situation, you want to contact your insurance agent (provided their office is still functioning) or your insurance carrier and request that they send you a certified copy of the insurance policy.
For those of you who are not directly impacted by hurricane Harvey, I urge you to do two things. First, do some due diligence to research the charity of your choice that you are going to generously give to. Secondly, take this as an opportunity to assess your own disaster preparedness. How are you doing with document retention and storage? How good are your insurance coverages? Have you identified any gaps in your current policies?
In my next post, I will talk about the anticipated impact this storm and disaster will have on landlords and rehabbers.