Water Damage Insurance Claims

By: Licensed Mold Assessor Brad Fishbein

August 7, 2018

There it goes again…

Your hard earned money lost…

Why you ask?

Because you’ve been handing it over to your homeowner’s insurance month after month… after month.

But then, something happens…

Your water heater blows while your family just spent your savings on vacation.

After an exhausting trip back home, you’re greeted with…

….puddles of water and mold growing EVERYWHERE!

Yep, Your home has water damage…

mold growing


You have homeowner insurance and they’ve got you covered, right?


Well, if you ever had the unfortunate experience of having to file an insurance claim

Then you know how difficult it is to collect from water damage insurance claims..

Your homeowner’s insurance company is of no help… What happened to all the promises?


Keep reading to have peace of mind.

In this guide, I will show you what you need to know, to get what is owed to you.

How The Homeowner’s Insurance Claim Process Works

Water damage can occur in the home through many different occurrences.

Whether it be a:

Or if you’ve upset ZEUS lately…

How The Water Damage Claim Process Works Zeus

Dry it out!

The main goal when you have water damage in your home is drying the water damaged area out as soon as possible.

The sooner that the area is dried out, the limited the damage and opportunity for mold to grow will be.

Step 1: Call An Emergency Restoration Company

The emergency restoration company will dry the area out to limit the amount of loss

Step 2: Report The Leak To The Insurance Company

The insurance company has to know about the loss in order to pay you

Step 3: Insurance Adjuster Assesses

An insurance company comes to your home to assess the damage. The insurance adjuster represents the insurance company. The insurance company will then decide whether they will cover your loss. Usually, insurance adjusters are required to assess your damages within 15 days of notification.

Step 4: Obtain Estimates To Repair Damage

You will obtain estimates from various contractors to repair the water damage.

Step 5: Agree To Insurance Payout

If the insurance company agrees to cover the claim, you will come to an agreement on the cost of the claim.

Step 6: Determine Which Contractor Will Do The Work

This may be either a contractor you decide or one the insurance company designates depending on your insurance policy.

Step 7: Have The Work Started

Get started with the restoration of your property.

Step 8: Insurance Inspections

Have the work checked by your mortgage company and get paid in installments (if you have a mortgage on your home)

water damage insurance claim

Homeowner’s Insurance Policy Exclusions

Unfortunately, every single word on your insurance policy can be held against you when you make a claim for water damage.

Remeber all that text you scrolled passed before clicking “I ACCEPT”?

Here’s the thing:

Your insurance policy has a TON of vague information. (On purpose!)

I mean sure, they have sections where they discuss coverage limits, loss assessment, conditions, and duties.


Most of the time, the homeowner’s insurance policy even has a definitions page near the beginning of the report.

home owners insurance definitions


The problem is the gray area…

Homeowners Insurance companies don’t make massive profits by paying every policy out.

Shocker right?

A company doing everything they can to make a profit?


They do this by specifying the highest likely situations don’t fit within the conditions outlined.

A great example is anything that is “An Act of God”…

Zeus Strikes Again!

I used to be a public adjuster and I can’t tell you how many times my client’s situation does not fall into any of the conditions outlined in the report.

Many times when an insurance company decides that they are not going to cover a claim, it is due to the client’s actions and their lack of details about the cause of the water damage (or in some cases too much information!)

There are two very important things that you must do the minute you have a leak or notice any kind of mold damage:

Report The Leak ASAP ** **

cartoon has leak

If something occurs during business hours, call your agent immediately.

Outside of business hours, there is usually some 800 number that you can call.

If you cannot get a hold of anyone, call the next day first thing in the morning.

It is very crucial that the water damage area gets dried out as quick as possible, so if you cannot get a hold of anyone, it is usually ok to call a water damage restoration company.

Make sure you water damage restoration company is willing to deal with insurance though!

That is a very important question to ask whichever company you decide to hire.


Not that WTF silly. The F in this acronym I am talking about is FLOOD!

You see your insurance policy will unlikely cover flood damage.

Flood Insurance policy usually have to be purchased separately.

Even if you mean, “My kitchen is flooded” meaning the dishwasher is leaking, it could cause some confusion.

Just avoid the word “Flood” altogether when speaking to the insurance company.

Put Everything In Writing

insurance letter to claim money

Not only should you keep a log of everything that occurred:

  • Whom you called
  • The complete timeline

But you should also communicate with them as much as you can through email after the initial phone call.

Your goal is to make a paper trail of every interaction with the insurance company, possible.

Don’t be afraid to ask for an emailed transcript after a phone call.

Getting everything in writing will ensure that there is no “he said, she said.”

“The call may be recorded for quality assurance” – but who has access to the data?

Not you!

If you have not settled your insurance claim within 45 days…
…demand a written explanation from your insurance company why it is not.

It Can Potentially Save You Thousands of Dollars. DO NOT SKIP THIS PART!

If you take nothing else away from this article, you frankly need to understand this part.

Hear me out:

I am not going to tell you that you need to read the entire policy, because I know most of you will not.

But I would suggest it.

If NOTHING else…

The number one area of the homeowner’s policy that the insurance companies will point to when they deny your claim is usually under Section 1 under “Conditions”.

There are two specific areas of Section 1 that you need to be totally aware of:

On this policy, check out Number 2 letter A:

water damage insurance claim

Number 2, Letter A reads

“Give prompt notice to us or our agent”

Here’s the problem:

“prompt notice” isn’t defined.

I literally have seen a client get denied being paid because they called the insurance company two days later.

The insurance company claimed the insured did not give “prompt notice” of their water leak.

A Year-Long Battle Was Fought

The insured did wind up collecting, but that was after a year and a half battle with the insurance company.

To avoid this, you should contact your insurance company as soon as possible.

The other area that you need to be mindful of is letter D, Number 1:

water damage insurance claims exclusions

If you look next to number 1, it states:

“Make reasonable and necessary repairs to protect the property”

Here’s the problem:

“reasonable and necessary” again, is not defined.

Statements like these are found throughout your insurance policy.

These are what we refer to when we say gray areas.

Other Exclusions

Chronic Leaks – Chronic leaks means a leak has been on-going and you just let it go.

Remember, you have a duty to report a leak right away

Outside Sewer Water- Most policies require you to buy a separate policy for sewage water

Toilet Water Damage Insurance Claim

Emergency Restoration Companies

You are going to discover something early on in the process which is totally going to


What am I talking about?

The amount of money it costs to have these water damage restoration companies come into your home and dry it out.

No matter what income bracket you are in, it will make you question what you are doing and consider starting an emergency disaster restoration business.

Ok, maybe I’m exaggerating a little, but for the little amount of work it seems like they do, they cost A LOT of money.

But here’s the truth:

Having your place dried out quickly and effectively is super important.

This will prevent mold growth and possibly save having to discard any personal belongings or unnecessary building material.

When Do You Call Them?

As stated earlier, always try and run it by your insurance company if possible. Depending on what time of day it is, that may not be feasible.

If you do get a hold of the insurance company first, they may tell you that you need to use their vendors.

Generally, the dry out process is pretty straightforward.

The insurance company wants to limit their liability, so it is in their best interest to have a company that knows what they are doing to perform the task.

Let’s say for example:

It is the middle of the night, many insurance companies have 24-hour customer support.


Some companies do not.

What do you do?

That is a question that should be geared towards a lawyer. What I will say though, it is crucial to dry the area out as soon as possible!

Can You Pick Your Restoration Contractor?

That may also be in the hands of the insurance company.

For example:

In the state of Florida, their state-run insurer called Citizen has issued a new mandate starting in February of 2018.

This new mandate states that you can use your own contractor, however, you will be capped at $10,000 to repair the water damage. If you use their contractors, you will not be capped.

Read More About This:

In The Sun Sentinal

It’s a shady tactic that more and more insurance companies (especially state ran insurers) are trying to put into place.

Insurance Adjuster vs. Public Adjuster

What is the difference between an Insurance Adjuster and a Public Adjuster?

This a question that I get very often.

I’ll put it in black and white for you:

The Insurance Adjuster- represents the insurance company.

The Public Adjuster- represents the public AKA You.

It’s that simple.

What Is The Role Of The Insurance Adjuster?

The insurance adjuster is usually a third party adjuster (sometimes works directly for the insurance company) that is assigned by the insurance company to estimate the cost to repair the damages in the home.

While yes, they are the third party, make no mistake about it, they are representing the insurance company.

Yes, there are many honest insurance adjusters, but they want to keep getting work from the insurance companies. They are looking for the least amount possible to fix the damage in your home.

The insurance adjuster MUST be part of the process. You do not have any choice whether one is assigned or not.

What Is The Role Of The Public Adjuster

The Public Adjuster is usually licensed through the state and is hired by you, the insured, to represent yourself against the insurance company.

They are usually not paid for the services upfront and get paid on a percentage of the amount you receive from the insurance company (usually 10%, but may vary from state to state).

This means they are trying to get you as much money as possible because it means more money for them.

While the Insurance Adjuster must be part of the process, the Public Adjuster is not required to be part of the process. They are hired by you at your discretion.

What You Need To Know About Public Adjusters

I used to be a public adjuster and have worked with them in many separate situations, so I feel completely qualified to answer this.

What I am about to tell you may be a little shocking to you, but here it goes…

In my opinion:


Again, this is just my opinion from experience. I have dealt with clients in the past that would disagree with me as they had wonderful experiences with public adjusters.

public adjuster sign up

What Is My Beef With Them?

It’s not necessarily that I have a beef with them, it’s just that the most successful claims against insurance companies in my past have been with the help of lawyers.

There have been multiple situations where the Public Adjuster actually has an attorney that he works with on every case.

My theory is:

Why pay the middleman?

Go directly to a lawyer that has experience with filing claims against insurance companies.

Again, that is just my personal opinion.

The most important thing is that you have somebody on your side that has experience with insurance claims.

The reason why Public Adjusters came into existence is to protect the public against insurance companies.

It’s a necessary field, but for my money, I’m going to the guy directly with a legal background.

Homeowner’s Insurance Claims Payments

Now comes the fun part. You’ve had a super stressful time dealing with the insurance company, but it doesn’t stop there.

The water damage restoration contractor, the general contractor doing the putback, and maybe even the mold remediation professional are all breathing down your neck to get paid.

You just want the repairs done and your home back to normal, right?

Unfortunately, it’s not always quite so simple.

What You Need To Know If You Have A Mortgage On The Home

Remember when you got approved for that mortgage, you went to the closing table and signed what felt like a million pieces of paper to get the home of your dreams?


Somewhere in the middle of those millions of papers, you signed a paper that may have stated that in the event of an insurance claim, the check will be made out to both you and the insurance company. Both parties need to sign the check in order to get it cashed.

Getting the insurance company to sign the check is not so simple…

Insurance companies now disperse your insurance money in thirds and require a representative from the bank to check to make sure you are doing the work.

They actually have a good reason why they do this.

Here’s what happened:

Back when around the time in 2003 when three major hurricanes hit the Southeast over a one year span, insurance companies paid out a ton of money.

Once the insured’s agreed with the adjustment report, you received your check.

The problem was there were many people that took advantage of the system. They would receive money from the insurance company and do things like go to Vegas, maybe buy a new car, or just leave the home in ruins.

here do what you want

Mortgage companies have an interest in your home. Most of the time they have more on the line than you have equity. This is why this became the norm.

When And How Do You Recieve Money If You Have A Mortgage

You will receive your payment in three installments.

1st Installment- You will receive 33.33% upfront. Of course, “You” don’t necessarily receive it, the contractor doing the work does.

2nd Installment- Another 33.33% comes when you are halfway done with the work. When the contractor tells you that you are halfway done, you would call the mortgage company and order what is called a “loss draft inspection”

** This is actually an extremely important part of the process

Here’s why:

The inspector the mortgage company sends to your home usually works for a third party company and has no interest in whether you are 50% complete or not. Some of the time, they also don’t know or realize how you are affected.

Sometimes the bank will provide them with the adjustment report to see how the money is allocated.


Most times they will not. They will just be provided with the total amount of the claim. They will then “eyeball” to see if the work completed is at least 50%.


I’m not saying that you should try and bribe the inspector or give them an offer they can’t refuse. I’m just saying, don’t assume the inspector to know the urgency of that inspection being marked at least 50%.

Cool insurance agent

3rd Installment- Depending on who your bank is, they will generally release the last 33.33% installment at anywhere from 90-100% complete.

What If You Don’t Have A Mortgage?

If you don’t have a mortgage, congratulations!

You do not have to deal with the mortgage company and the process is easier for you

Denied Insurance Claims

Denied Insurance Claim

Ok, maybe you are reading this after the fact and didn’t even think of getting a public adjuster or attorney.

Your hoped and dreams have been crushed. How the heck are you going to come up with money to fix your home?

I am going to be upfront with you…

Your options are very limited

Many public adjusters may not take on your case.

Your only hope may be going with a lawyer.

Does Your Claim Fall Within One Of The Exclusions?

This is what your attorney will probably have to determine. If you believe is does not and you have a case, litigation may be your only choice but consult with an attorney to establish your options.

Do You Have A Story To Tell?

I want to hear your horror stories with insurance claims.

Your experiences with insurance and public adjusters.

Leave a comment below and tell me about it!

Meet the author: Brad Fishbein is an ACAC council-certified Microbial Investigator. In the fall of 2012, he became a Licensed Mold Assessor in the State of Florida through the Department of Business & Professional Regulation. Brad has helped homeowners with over 5,000 successfully completed Mold Inspections since 2009.

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