Miami Plumbing Leak Egregious Denial from Insurance Company - Overturned in Litigation

Miami, Florida - VIP Adjusting usually doesn't handle many claims in Miami. Our headquarters are in Fort Pierce in St Lucie County, and we normally handle claims throughout the Treasure Coast and Space Coast, from Jupiter, to Stuart, to Vero Beach, and Indialantica, but a client referral came to us in Miami.

This client, M.V., came home from work to find water spraying from the wall in his garage where his washing machine hookup connected to the wall. What happened next will probably make your head spin.

Even our public adjusters were surprised with the conduct of this insurance company!

The Loss - Pressurized plumbing leak to washing machine

The homeowner/insured came home from work and entered through his garage. He immediately saw water on the floor and spraying from the wall at about chest height since the washing machine was on a raised step.

Thinking quickly, the insured snapped a quick video and turned off the water supply to the house at the main valve to the home. 

The damages to the garage and kitchen

Obviously there was water spraying in the garage. The pressure from the spray had burst a hole through the drywall and was spraying out onto the concrete floor. Aside from the drywall damage in the garage, and what would be required to open the wall and repair the pipe, the damages in the garage were minimal, but, a lot of water also ended up inside the wall, which was shared with the home's kitchen.Inside, there was visible damage to half of the kitchen's cabinets, and in one space between the cabinets, you could see extensive staining and discoloration to the drywall behind the cabinets. Adjacent to the cabinets, tile baseboards had fallen off and broken.Despite the relatively minimal visible water in the garage, this home clearly had much more extensive damage and required significant repairs. 

A plumber initially opened the garage wall, and repaired the supply line to the washing machine, leaving it open for inspection by the insurance company. What remained outstanding was removing and replacing all the kitchen cabinetry, drywall in the kitchen, replacement of the tile backsplash, and replacement of the continuous tile flooring that could not be matched throughout the home.

The Insurance Claim and Outcome

For such a small leak, there were some pretty substantial repairs to restore the home to pre-loss condition. Maybe that's what made the insurance company do what they did next.

Despite the fact the insured had a video of the active leak from the burst pipe (that wasn't leaking when he left for work), the insurance company conducted its "investigation" and DENIED the insured's claim, declaring that the homeowners' leak was the result of "constant or repeated seepage or leakage which occurs over a period of time."

This language in the insurance policy is meant to exclude coverage for leaks that have been ongoing and known to the insured for a long period, essentially reinforcing the duty to protect the property from further damages. An insured who can't be bothered to address a leak for months shouldn't be entitled to insurance coverage because the damages have likely worsened because of the insured's actions. 

A leak that occurred the same day and was actively observed and documented, however, is not that. To adopt this insurance company's view, this insurance policy would cover all plumbing leaks except when the insurance company didn't feel like paying for it. Technically, the first drop of water is a new leak and the second drop is "repeated leakage." This is just an illogical conclusion.

The real outcome

Unfortunately the insured had to file a lawsuit to obtain a fair recovery and obtain the benefits he was entitled to under the insurance policy. Luckily, it happened in short order. The time from the date of loss to the final settlement in litigation was just about 6 months, which is pretty reasonable for Florida insurance claims. 

At the end of the day, a settlement was negotiated that let the insured replace their kitchen and backsplash, but instead of replacing the full tile floor because of the broken baseboard, the insured agreed to replace the baseboard with wooden baseboards.

Had this homeowner not connected with a public adjuster, he may well have never pursued the insurance company after they issued the coverage denial, and that's exactly what most insurance companies hope for.