Coverage Over Damages & Repairs FAQs

Last updated: March 29, 2016

Common Questions About Coverage

I Have a Replacement-Value Policy and My Home Was Recently Damaged. The Company Has Accepted Repair Estimates But Refuses To Pay the Full Replacement Cost Until Repairs Are Complete. Can They Do That?

Yes

  • Insurance companies typically pay a covered replacement-value loss by providing an initial payment based on the actual cash value (ACV).  

    • The ACV is the replacement cost minus depreciation.

  • When you present your insurance company the final receipts or other proof that repair work is finished, you get the rest of the settlement. This guarantees that a covered loss has been paid in full.

Most insurance policies require that replacement/repair occur in a set time frame, such as 180 days.

  • If a damaged item can be repaired, the company has the right to pay based on repair rather than replacement.

Does My Standard Homeowners Insurance Policy Cover Damage to the Structure of My Home or Its Contents if Caused by Flood, Flood-Related Erosion or Flood-Caused Mudslides?

No

However, you can often purchase insurance that provides these types of coverages.

  • Your insurance agent may be able to help you.

  • If your community has opted to participate in the National Flood Insurance Program (NFIP) - administered by the Federal Emergency Management Agency (FEMA) - you may be able to purchase coverage for those types of damage through that program.

The Insurance Company Says They Won’t Cover Damage to My Home Because It Was Due To Faulty Workmanship. Can They Do This?

Yes

If someone works on your home and other damage occur over time because the original work was faulty, your insurance company can deny the claim due to workmanship issues.

  • When this happens, it’s the responsibility of the company or individual who did the work to fix any damages caused by their faulty workmanship. This is not covered under most insurance policies.

  • Check your specific policy. Know what perils are covered.

My Home Suffered Hail Damage on One Side. The Company Proposes Replacing the Damaged Siding, But the New Siding Won’t Be an Exact Match. Is the Company Required To Provide Matching Siding?

No, Not an Exact Match

The company owes repair or replacement only for the portion of the home that was damaged.

  • This is true whether it is covered damage to a roof, indoor carpeting or siding.

  • The company should provide a settlement sufficient to replace damaged materials with material that is similar and of "like kind and quality".

    • It does not owe for portions of the home that were not damaged.

My Neighbor’s Tree Fell During a Recent Storm and Caused Damage to My Home. I Called Their Insurance Company and They Said That They Will Not Cover the Cost of the Damage. Can They Do This?

Yes, Most of the Time

Insurance policies cover negligence of a policyholder.

  • If there was no evidence that the tree was in danger of falling and causing damage before the storm, the neighbor’s insurance company may not be responsible.

  • However, this type of damage is typically covered under your own homeowners policy.

The Food in My Freezer Spoiled Because I Lost Power in My Home. Does My Homeowners Policy Provide Coverage for This?

Not Usually

The basic homeowners policy usually does not.

  • However, this is a popular coverage for insurance companies to offer.

    • You may be able to buy this coverage for a small addition to the premium.

  • There is also the issue of where the power was lost.

    • Some policies are limited to coverage for electricity lost in the home or where the electricity enters the home.

    • Others limit coverage to a certain distance from the home.

  • Ask your agent about the availability and cost of this type of coverage.

Our Sump Pump Failed, and the Insurance Company Is Denying Our Claim Because the Water Backed up Through Our Sewers. Can it Do This?

Yes

Most insurance policies exclude water damage for water that backs up through sewers or drains.

  • You can ask your agent about adding sewer backup coverage to your policy.

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