Water damage coverage removed


How would you feel it you had you a sudden and accidental water damage event occur in your home and find out that your insurance company wouldn’t cover it.  Unfortunately, this will be the case for many who have People’s Trust Insurance Company.  I couldn’t even begin to tell you how many times I here from my clients that when they went to buy their policy that they never read or were even explained the different coverages in their policy.  This is not just an agent issue but an issue with policyholder’s only looking for the “cheapest” policy.  They don’t think about the most common type of insurance claims, water damage, but instead only catastrophic events like fires and hurricanes.

More and more carriers are removing coverages or limiting coverages to allow them to pay as little money as possible or put time frames for giving notice for hidden damage thereby shifting the burden of proof onto the insured.

Be alert to changes in your policy renewals that may limit damage from water to incredibly minuscule coverage or none at all.

When shopping for insurance, policyholders often tell their agents and insurance companies they want full and complete coverage if a loss occurs. Some policyholders are savvy to research the coverage they want to purchase the insurance to ensure that the policies fit their specific needs. Yet, some policyholders have very limited choices (if any) and insure their property with the only company that will give them insurance. And then you have the situation where your coverage significantly changes at renewal and the policyholder does not know or grasp the severity of the change.

As we have discussed before, insurance contracts are contracts of adhesion and the policyholder does not get to add in a paragraph or send over their draft of the contract to have the insurance company approve and bind it. The policy forms and endorsements are written by the insurance company. Policyholders need to be aware that not all business insurance at replacement cost or “all-risk homeowners policies” are created equal.

Be on the lookout for this People’s Trust policy change:

Effective June 15, 2016, they will exclude all water damage to homes that are older than 40 years old.

The policyholder can get an extremely limited amount of coverage for homes over 40. The sub-limit is 10,000.00 for water losses. Policyholders will be offered a “discount” to their premium if they don’t get the $10,000.00 endorsement but this not gift or favor to policyholders.

People’s Trust has been heavily criticized for not providing coverage or handling claims in a proper fashion. The company’s massive marketing mailer campaigns with cute puppies and babies fooled some those shopping for insurance but their service after the sale has been riddled with problems. Take time to research Rapid Response Team and you will see many complaints.

The Sun Sentinel reported this on the policy change and received information directly from People’s Trust’s spokesperson Michelle Ubben:

The exclusion removes water damage- including penetration through roofs or walls and discharge from plumbing, heating, air conditioning units, sprinkler systems or household appliances- as a covered peril for any home more than 40 years old.

New customers will be able to purchase $10,000.00 in water damaged coverage as an option and renewing customers will see the limited coverage automatically added to their next year’s policies but can opt to remove it.

Exclusions for homes over 40 years old, can also be found in Federated National, Tower Hill, Heritage, United Casualty & Southern Oak.

The $10,000.00 sublimit will be inadequate for these types of losses and the terrible thing is that many policyholders may not even realize this restriction until their pipe bursts causing $50,000.00 worth of damage. Be sure to study and read ever shingle shred of paper that comes in the mail from your property insurance company so you can understand your coverage.