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When to put in a claim on Homeowner's insurance

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rated:
There are various opinions on the internet re: when to put in a homeowner's insurance claim.  But I would really appreciate FWF's opinion!

We have a legitimate claim (pipe leak leading to water infiltration in the walls and mold), which I believe should be covered by insurance.  Our deductible is $1000.  Estimated cost of repairs is $3000-5000.  My own thoughts are below...

Pros of placing a claim: 
I could get paid!

Cons of placing a claim:
They could raise my rates significantly
I could be cancelled (there is a rumor that anything involving the word "mold" leads to a much higher risk of cancellation
I could put in a claim and be denied for some reason, and then still have a claim on my record.

Really appreciate the FWF hive mind's opinion.  If it helps at all, my Insurance company is Arrowhead (obtained through Geico ) and I pay around $1000 per year.

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rated:
How long have you had your current policy? And have you ever made any other HO claims?

If a long time and no other claims, then I would have no issues doing it myself. Mold is nothing to take on yourself, and may end up costing you more than you realize.

rated:
SummerSoFar said:   How long have you had your current policy? And have you ever made any other HO claims?

If a long time and no other claims, then I would have no issues doing it myself. Mold is nothing to take on yourself, and may end up costing you more than you realize.


Good question.

Unfortunately we just bought the home and have been renters beforehand. We have had the home and the policy for only 2.5 months, so no claims. Probably not something in our favor, but I'm not sure.

rated:
Yikes. I would be really worried that a claim would result in a non-renew.

rated:
What about loss of use? Will you be staying in a hotel while any work is done? Also, insurance companies are not fond of water damage claims. Odds are they won't renew you vice cancel...

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Do you think this is a one off pipe leak or potentially an issue with all of the plumbing? You don't want to have to deal with a non-renew and get lumped into your state's high risk category or experience high rate hikes.

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phisher4 said:   We have a legitimate claim (pipe leak leading to water infiltration in the walls and mold), which I believe should be covered by insurance.  Our deductible is $1000.  Estimated cost of repairs is $3000-5000. 
  Since when would insurance cover something that is part of normal home repairs and maintenance? Homeowners insurance is for major damage, not a substitute for deferred maintenance. And if you bought the house 2 months ago, who is to say it wasn't leaking before you even bought it? 

rated:
Atikovi is spot on. Look at your HO policy wording (it's not hard to read a policy), most policies cover a loss that is sudden & accidental, not occurring over a period of time " a pipe leak leading to water infiltration in the walls ". But understand that every state and ins carrier is different, so I may be totally wrong. Your best bet is to read your policy and have a sit-down with your ins agent, that's what he is there for.

rated:
atikovi said:   
phisher4 said:   We have a legitimate claim (pipe leak leading to water infiltration in the walls and mold), which I believe should be covered by insurance.  Our deductible is $1000.  Estimated cost of repairs is $3000-5000. 
  Since when would insurance cover something that is part of normal home repairs and maintenance? Homeowners insurance is for major damage, not a substitute for deferred maintenance. And if you bought the house 2 months ago, who is to say it wasn't leaking before you even bought it? 

  
A slow leaking pipe is not necessarily "deferred maintenance". If a pipe springs a leak inside a wall or ceiling, then it really depends upon how slow it leaks and where the water collects. You can't "defer" what you can't reasonably know about. That said, I have no idea how much insurance policies tend to care about that sort of logic.

However, the key gotcha in this case IS the 2 month history, as you point out. Very small likelihood that the leak was slow enough to not notice before the mold started, but only started after you purchased.

rated:
atikovi said:   
phisher4 said:   We have a legitimate claim (pipe leak leading to water infiltration in the walls and mold), which I believe should be covered by insurance.  Our deductible is $1000.  Estimated cost of repairs is $3000-5000. 
  Since when would insurance cover something that is part of normal home repairs and maintenance? Homeowners insurance is for major damage, not a substitute for deferred maintenance. And if you bought the house 2 months ago, who is to say it wasn't leaking before you even bought it? 

  The plot thickens:

The original owners of the house had an inspection of the pipes in question (which were not up to code) and had remediation work done 3 years ago.  They have a letter which they provided to me which documents this.   They claim there have never been any leaks in the past...  The house is 3.5 years old.

rated:
phisher4 said:   
atikovi said:   
phisher4 said:   We have a legitimate claim (pipe leak leading to water infiltration in the walls and mold), which I believe should be covered by insurance.  Our deductible is $1000.  Estimated cost of repairs is $3000-5000. 
  Since when would insurance cover something that is part of normal home repairs and maintenance? Homeowners insurance is for major damage, not a substitute for deferred maintenance. And if you bought the house 2 months ago, who is to say it wasn't leaking before you even bought it? 

  The plot thickens:

The original owners of the house had an inspection of the pipes in question (which were not up to code) and had remediation work done 3 years ago.  They have a letter which they provided to me which documents this.   They claim there have never been any leaks in the past...  The house is 3.5 years old.

  
If there was never a leak in the past... why were they inspecting pipes and having "remediation work" (whatever that means) done?

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phisher4 said:   
The original owners of the house had an inspection of the pipes in question (which were not up to code) and had remediation work done 3 years ago......The house is 3.5 years old.

  What do you mean they were not up to code on a new house? Didn't the plumbing have to be inspected to get a certificate of occupancy? 

rated:
atikovi said:   
phisher4 said:   
The original owners of the house had an inspection of the pipes in question (which were not up to code) and had remediation work done 3 years ago......The house is 3.5 years old.

  What do you mean they were not up to code on a new house? Didn't the plumbing have to be inspected to get a certificate of occupancy? 

  Apparently the house was not up to code (the house was a spec home), and this was discovered at the time the plumbing was inspected...  The current problem stems from the remediation work.

rated:
Contact the builder. If they don't want to take care of it send it to small claims court.

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SummerSoFar said:   Contact the builder. If they don't want to take care of it send it to small claims court.
  
All major builders have mediation/arbitration clauses in their contracts. Most consumers don't have the ability to sue a builder.

rated:
Kevo171 said:   
SummerSoFar said:   Contact the builder. If they don't want to take care of it send it to small claims court.
  
All major builders have mediation/arbitration clauses in their contracts. Most consumers don't have the ability to sue a builder.

  
This country is just so awesome I cannot stand it.

rated:
What state?
Who's your insurer? How much is your insurance?

I *think* some states require builders to stand by their work to varying degrees for multiple years. THat might help.
Which insurer it is and what you pay now may impact whether or not the claim is a good idea or not.

Was the leak on visible pipe or buried within/under walls or floors?

rated:
Years agi made a similar claim when had $500 ded, rate doubled for 5 years essentially turning the claim into a loan. We now have at least 5k deductible and pay about half original premium

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