How Old Is Your Damage

Every homeowner’s nightmare scenario: you go out of town and return to a flooded home with significant water damage. Until recently, insurance companies took advantage of a part of their policies which allowed them to deny claims for water leaks that lasted 14 days or longer. A recent Florida court decision may be putting a stop to these denials.

In the recent Florida case, Hicks v. American Integrity Insurance Co., a homeowner went out of town for 5 weeks. During that time, the water line to his refrigerator starting leaking and the leak became progressively worse over time. The insurance company denied the claim because the pipe leaked for more than 14 days. The homeowner argued that he should at least be covered for the damages that occurred within the first 13 days. The Court agreed with the homeowner.

The court explained that the homeowner did have coverage for the damages that occurred within the 14 days because the fact that the leak continued for more than 14 days did not take away from the fact that the first 13 days of the leaking also caused damages to the home. In reaching this conclusion, the court relied on the well-established rules that: (1) exclusions in insurance policies are construed very narrowly and (2) if a statement in an insurance policy can be read two ways: one way which allows for insurance coverage and another which would provide for a denial of coverage, the court must side with the reading of the statement that grants the homeowner coverage for the loss.

The Hicks case is certainly a win for homeowners because it prevents the insurance company from denying insurance coverage for all of the damages simply because some of the damage was caused when the leak continued for 14 or more days. Although these types of cases may still require the filing of a lawsuit against the insurance company, the Hicks decision will provide the homeowners with some assistance in litigating these cases. The difficult part will be determining and proving which damages occurred within the first 13 days. It will be important for the affected homeowner to hire an attorney that can assist with bringing the case and an expert who can conduct a thorough investigation to determine when the damages occurred.

Public adjusters should also be aware of the Hicks decision so they can attempt to categorize the damages listed in their reports into what occurred within the covered period and what occurred after what the insurance company will argue was the covered period.