With Hurricanes On The Rise, Will Your Insurance Policy Cover The Water Damage?

While Florida residents and building owners were preparing their properties for the arrival of Hurricane Idalia in August, property insurers were expecting an influx of claims to come rolling in once it hit. 

An estimated 808,321 single-family and multifamily homes with a combined reconstruction cost of $238.4B were in the path of this hurricane. With water damage, flooding and wind damage from hurricanes on the rise in the U.S, now is the time for residential and commercial real estate owners to take a closer look at their insurance policies to make sure that they will be covered in the event of water damage. 

Hurricanes and other natural disasters are among the many possible causes of water damage, which can be devastating to a property and an owner’s business if the water damage is not dealt with promptly. Goodman-Gable-Gould/Adjusters International President and CEO Harvey Goodman is urging owners to be proactive with their buildings and their policies so they don’t get caught in a storm with a lack of funds to repair the damage. 

“The faster an insured can act to mitigate water damage, the better,” Goodman said. 

Goodman-Gable-Gould/AI is a firm of public insurance claim adjusters who help policyholders comply with all policy requirements and assist in loss measurement, claim preparation and negotiations with the property insurer. Goodman spoke with Bisnow about the importance of properly protecting a building against water damage, some steps building owners can take to prepare for water damage, why some insurance policies may limit or exclude coverage for this type of damage and what public adjusters can do to help.  

Bisnow: What are some of the most common causes of water damage? 

Goodman: There are several possible causes of water damage, some of which are more common than others, and some many people may not have considered. Frozen pipes are a particularly common cause, especially when areas experience an unexpected cold snap. Last December, we experienced a few particularly cold days around Christmas that swept across multiple states. Several of our clients experienced burst frozen pipes as a result, particularly ones with pipes on their exterior walls that are not well insulated. 

Other causes of water damage include failing plumbing joints — which can often be caused by a lack of proper adhesive in the joint — a back-up of sewers and drains, and, of course, floods. One interesting cause could be sprinkler leakage, which can be caused by something as simple as a person hanging a garment bag on a sprinkler in a hotel room. 

Bisnow: When a building owner experiences water damage, what are some of the steps they should take right away to minimize damage? 

Goodman: Taking steps to mitigate the damage in the first 72 hours is important to prevent mold formation, which will cause a whole host of problems on its own if it occurs. The best way to avoid this is to bring in experienced professionals who can help with drying and dehumidification as early as possible. We have relationships with vendors who regularly perform these services; we often connect our clients with them right away to start extracting water and cleaning the impacted areas. 

Bisnow: What are some common ways to prevent water damage? 

Goodman: Along with taking the necessary steps to avoid frozen pipes, which include insulating them, running water through them and leaving the heat on when possible, even in unoccupied buildings, we also recommend purchasing water flow monitors. These are tools that can detect even minor water leaks, so the leaks can be addressed before they cause serious damage. Many insurers are currently offering credits toward the purchase of water flow monitors and will sometimes pay for them in full after a claim has been made. 

Bisnow: What should building owners be looking for in their insurance policies in regard to water damage? 

Goodman: The main things to look for are water limitations and exclusions, which exist in policies to deny or limit coverage based on water-related events. We had one client who experienced severe water damage to a building that was under construction. In their policy, they had a very low limit for interior water damage, and most of the repairs they needed would not be covered. 

Fortunately, we were able to separate the damage into three distinct events instead of just one incident, which allowed the insured to have a greater amount of coverage, which they needed. In today’s tight insurance market, insurers are adding higher water deductibles and lower interior water dollar limits in many policies. Often, the insured is so busy that they haven’t paid much attention to these policy changes until they have damages, and it is prudent to be on the lookout for such policy changes ahead of time. 

Bisnow: When water damage strikes, what can a public adjuster like Goodman-Gable-Gould/Adjusters International do for clients that other insurance adjusters might not? 

Goodman: The fact that we have several offices across the country allows us to react quickly and offer assistance to mitigate the damage as fast as possible. After Hurricane Ian impacted several of our clients last year, we were able to immediately secure emergency drying and clean-up services for them due to our existing relationships with vendors. We can also review insurance policies to quickly identify any potential limitations or pitfalls — something insurance company adjusters and independent adjusters, who represent various insurers — will not do. Property owners also need to understand that there is often more than one way to characterize and present a claim in order to receive the coverage and the claim payments they are entitled to, which is what we do for our clients.  

The biggest thing for owners to keep in mind is that they need to contact us as soon as possible so we can strategize with them, approach the recovery process efficiently and identify the best way to characterize their damages. We cannot put the toothpaste back in the tube once things have been presented improperly. 

This article was produced in collaboration between Goodman-Gable-Gould/Adjusters International and Studio B. Bisnow news staff was not involved in the production of this content.