Homeowners may not be fully covered for water damage under their existing homeowner’s insurance policy, Texas Department of Insurance warns

by John Chapman

The Texas Department of Insurance is warning state homeowners that many types of water damage to their home may not be covered under their insurance policy. The agency says that although some types of water damage are covered under most insurances policies, others are not. This could lead to costly repair bills for homeowners without comprehensive insurance protection.

A consumer information guide published by the Texas Department of Insurance notes that most homeowner’s insurance policies cover sudden, accidental water damage. However, the agency says most insurance policies do not cover damage caused by flooding, freezing pipes, water damage caused by continuous seepage, or mold caused by water damage.

Oftentimes, the difference between whether water damage to the home is or is not covered under an existing insurance policy can be a very fine line. For example, the Texas Department of Insurance notes that while sudden, accidental damage caused by broken plumbing, heating, or air conditioning is usually covered, damage resulting from gradual, repeated water from these units is usually not covered.

Determining whether water damage to your home is covered may also depend on the extent of insurance coverage under your policy. All-risk policies (also known as comprehensive coverage) offer wide protection that covers all causes of damage to your home and property unless they are explicitly excluded in your insurance plan. Named peril policies only cover types of damage that are named in the insurance policy. If your home suffers water damage that is not named in your policy, your insurance coverage may not cover the costs of repairing the damage.

Your homeowner’s insurance may also have a policy dollar limit which sets a maximum amount that the insurance company will pay to cover damage to your home. If the cost of the damage exceeds this dollar limit, you may be responsible for paying for repairs in excess of the coverage limit. Coverage costs for personal property that suffers water damage may also be limited depending on whether you insurance plan covers the replacement cost or the actual cash value of the property. Many homeowner’s insurance policies also set coverage limits on damage to certain types of valuable personal property, such as jewelry or art.

Personal property insurance coverage may also be limited to a certain percentage of your total homeowner’s insurance coverage. For example, an insurance policy may cap personal property coverage at 40% of your total homeowners insurance coverage. If your house is insured for $100,000, your insurance plan would only cover personal property damage totaling $40,000. Damage in excess of this amount to your personal property would not be covered under the existing insurance plan.

Homeowners may need to purchase additional insurance coverage to guarantee that their home and personal property is fully covered in the event of water damage. Windstorm and hail insurance coverage is available to homeowners living in the 14 coastal counties in Texas, as well as parts of Harris County or Galveston Bay; most homeowner’s insurance policies do not cover damage from windstorms or hail in these areas. Homeowners can also purchase flood insurance from the National Flood Insurance Program (NFIP) to cover flood damage to their home, which is also typically not covered under most insurance policies. Homeowners may also elect to purchase additional insurance coverage to protect against damage caused by sewers or drain backups, foundation damage, mold, water damage from plumbing, heating, and air conditioning units, or other sources.

Water Damage and Bad Faith Insurance Cases Handled by HO&P

If your home or property has suffered water damage, you may qualify to file a lawsuit and seek compensation. Homeowners and business owners who believe they were treated unfairly by an insurance company may also qualify to file a lawsuit. The first step in taking legal action is to consult with a law firm whose attorneys have the experience with water damage and insurance litigation advise you regarding your legal rights.

Although water damage may seem easy to identify, in order to prove that illegal damage caused by water or flooding has occurred, depositions must be collected from the parties to the lawsuit in order to establish the facts of the case. Documents regarding the properties in question, insurance policies relevant to the case, and evaluations of the damages suffered by the person who filed the lawsuit may also need to be collected in order to determine establish a case.

At Heygood, Orr & Pearson, our attorneys are ready to stand up for individuals and companies who find themselves in the unenviable position of having an insurance company refuse to treat them in a fair and reasonable manner. When an insurance company fails to treat its customers fairly and denies legitimate claims that should be paid, the lawyers at Heygood, Orr & Pearson are willing to take them on, expose their wrongful actions, and make them pay for their improper conduct.

Our law firm also has the financial resources to handle bad faith insurance cases involving unpaid claims from start to finish. In many instances, Heygood, Orr & Pearson invested hundreds of thousands of dollars in a case in order to take it to trial on behalf of our clients. Our team of attorneys is committed to achieving justice for our clients, whatever the cost.

For a free legal consultation to find out more about whether you qualify to file a lawsuit over bad faith actions by an insurer, contact the lawyers at Heygood, Orr & Pearson. You can reach us by calling toll-free at 1-877-446-9001, or by following the link to our free case evaluation form located on this website.

by John Chapman

John Chapman is a licensed attorney with experience in complex commercial litigation (including securities fraud, RICO, shareholder oppression, and derivative actions) and personal injury litigation.