Old Homes and $10,000 Water Damage Limitation

If you have a home in Florida and its over 40 years old, you may want to check your homeowners policy. In 2014, 74% of all homeowner claims in Florida were as a result of water damage.  As a result, insurance companies had to pay significant amounts to homeowners as they were required to do in order for their policy holders to fix the damages to their home. Since then, insurance companies decided to place limitations on policies insuring old homes which cut any kind of coverage you would normally have if you had water damage to your home. As of 2016, many homeowners are discovering that their insurance company is no longer allowing coverage for damages resulting from water. Instead, some carriers are requiring homeowners to “buy back” $10,000.00 worth of coverage for water damage by paying an additional premium. This has caused many homeowners to question why they have insurance at all.

The all-mighty Endorsement.

What’s an endorsement? Basically, it’s a change to your policy either modifying, adding or removing terms from the policy you have. Insurance companies place an endorsement commonly referred to as the “Limited Water Damage Endorsement” at the end or close to the end of homeowners policies when their policy becomes due for renewal. The endorsement either removes any coverage for water damage or limits your recovery to $10,000 in the event you have water damage. Many homeowners aren’t even aware of these endorsements because many people would likely not renew if they knew they weren’t covered for water damage to their home! Imagine buying your dream home and paying thousands of dollars each year to protect your home from unforeseen damages. Then one day as you leave to work, you turn on the dish washer and the water line connected to the back accidentally breaks. While you’ve been at work, your kitchen cabinets, walls, and surrounding rooms have been soaking in water for hours. Those nice cabinets are now swollen and can’t be dried out. The baseboards are now warped. Of course you do everything you can to dry up the water, but how do you plan on drying out the back of the cabinets when you can’t reach them? Unless you’ve acted quickly and called a remediation company, these soaked areas begin to develop mold. These costs quickly escalate to the tens of thousands of dollars in a matter of hours or days. You decide to file your claim and find you’re either not covered at all or covered for only $10,000. This situation happens more often than you think and could all be avoided if you become aware of these endorsements before damage occurs.

If you are unsure as to what type of policy you have or the types of coverage you have, please contact our office so we can have an experienced attorney review your policy.

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Erik Tyler Barnard, born and raised in Miami, Florida, is passionate about Insurance Law. Since 2015, Erik has played a critical role in several trials where he, alongside the talented trial attorneys at Barnard Law Offices, L.P., has recovered millions of dollars for homeowners where their insurance claims have been wrongfully denied or underpaid.
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