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2021 Insurance Policy Issues

Carriers are now adding a special endorsement on most Replacement Cost Value policies that limit water losses, of any kind, to $10,000.00. This means if you have a broken supply line, water leak or water system failure (e.g., broken water tank, AC leak) in your home and it floods, despite the damage, the Insurance company will only pay you $10.000. In addition, the will still apply your deductible, which is often $2,500.00.

In our experience, water losses are the most common losses policy holders face. Moreover, the Insurance company also requires you to mitigate your damages. This means, if you have a water loss, you may also need to hire a company to remove the excess water and dry-out your property to prevent the property from sustaining additional damage such as mold. These companies are not cheap and their bill digs into the $10,000.00 cap set on your Insurance policy.

Consumers must request a special rider that amends the policy in place and modifies the terms and conditions of the original policy/contract. The rider/endorsement needed removes the $10,000.00 cap on water losses and increases the premium. The premium increase may be nominal considering a water loss could cause tens of thousands of dollars in damage and happen more often then we like.