Spring Rains Are Coming, But Water Damage Is NOT Covered! Here’s What You Need To Know…

Tuesday, March 23rd, 2010

The exclusion sections of your policies are, arguably, the most important part of them. Why? Because that’s where you find what’s NOT covered. And that means YOU retain the risk of loss for those conditions. Uh-oh.

In your home policy, one of the most important exclusions in- volves water damage.

There are lots of ways water can damage your home. Some of them are covered, and some aren’t. Here are some examples that ARE covered…

1. A thunderstorm blows off a section of your roof allowing the rain to come in. The water damages your ceiling, walls, furni- ture and flooring. That water damage IS covered.
2. A pipe burst behind the wall in your bathroom. The water damages the wall, the ceiling below and rips onto your furni- ture. That water damage IS covered.

When you think about the examples above, you’ll realize that something happened to your house first, which then led to the wa- ter damage. Those causes of loss (called the “proximate cause” in insurance language) – wind and a burst pipe in my examples – are covered by your home policy. So, the water damage that ensues is also covered. That’s how it works.

So, when is water damage NOT covered? Plainly stated…when the water that causes the damage comes from the surface of the ground…from underground…or from sewer or drain backup the resulting damage is NOT covered by a standard home policy.

Surface Water

Surface water is water that is laying on the ground or flowing across it.

Your home policy will not pay for damage caused by surface water. It doesn’t matter where that water came from.

It could come from an overflowing creek or river, a standing pool of water due to hard rains, run off from a poorly designed swale, or whatever. If the water is on the ground and damages your home, your home policy excludes that damage.

Also, the damage caused by spray that comes off such surface water has a lot of dirt in it doesn’t change anything. Damage caused by mudflow is not covered in your home policy.

Underground Water

Water below the surface of the ground can seep into your home or pool. It can crack sidewalks, vault driveways and crack founda- tions. None of this damage is covered, either.

Backup of Sewers & Drains And Sump Pump Overflow Damage from these sources of water are not covered, either.

Can I Get Protection For Water Damage That Is Excluded By My Home Policy?

Yes, you can…except for underground water. Nobody will in-damage caused by surface water, mudflow, sewer or drain backup, and sump pump overflow.

Protection For Surface Water Damage

To protect yourself for damage caused by surface water you need a flood policy. Now, don’t let the work “flood” fool you. A flood policy covers “unusual and rapid accumulation or run off of surface water from any source.” For insurance purposes, a “flood” is not limited to overflowing rivers and streams.

However, a flood policy contains its own exclusions! The most important to our discussion are…

1. The accumulation of water must be “unusual and rapid.” Therefore, if your yard pools with water every time it rains, that’s not unusual. And it’s not covered.
2. The “flooding” conditions must affect two or more acres of normally dry land or two or more properties (including yours).

So, even if you have a flood policy, if the flooding condition is isolated to your property, and covers less than two acres, the resulting water damage is not covered.

Protection For Sewer & Drain Backup And Sump Pump Overflow

You can add this protection to your policy if you want it. There are limits and exclusions, as always. So, discuss it fully with your Protection Coach to see if it’s right for you.

This is an especially important protection if you have a finished basement. If your sump pump fails – and water damages your floor- ing, furniture, etc. – that damage is excluded by your standard home policy. But it’s covered when you add the appropriate endorsement. Talk to one of the Agents at the Gannon Agency.

What Should I Do?

Water may be essential to life, but it’s the greatest enemy of homes and property!

The most important thing you can do is to first understand that water damage, as I explained it above, is NOT covered by your home policy.

Then, knowing that, be sure to do everything you can to main- tain your property to keep water from pooling and/or flowing onto it. Because, in the end, you’re probably going to be on your own if your home suffers and damage.

And, finally, check with the Gannon Agency on whether a flood policy, or an endorsement for sewer & drain backup and sump pump overflow, would benefit you. We’ll discuss with you as to what’s available and what’s appropriate.

Remember, no insurance policy “covers everything”. Your home policy involves more that 39 decisions and options that impact how, and if, your claims will be paid! Yes…more than 3 dozen!!!

Protecting against water damage requires you to make some of those decisions. And we’re here to help you do just that. Thanks for your business!

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State Cracks Down on Auto Insurance Lapses!

Tuesday, March 23rd, 2010

Don’t ask me why, because I don’t know why. I only know what we’ve seen in our day- to-day operations. The DMV seems to be paying close attention to lapsed car insurance policies and, more importantly, enforcing the laws surrounding registered vehicles with no insurance.

Why should that matter to you? Because a series of mistakes could land you in some hot water! Here’s how to easily keep this major hassle out of your life.

What the Law Says

I’m not offering legal advice, and I can’t cover the entire Motor Vehicle Code here. (Nor would I want to – as if insurance isn’t boring enough already?) But here’s an important part of it…

Simply stated, PA state law requires you to insure all registered vehicles. If you drop the insurance on a registered vehicle – regardless if it’s intentional or not, and even if only for a day – your registration is subject to a 3-month suspension. You must return the registration plate, sticker, and card to the DMV.

However, if you reinstate your insurance quickly, you can avoid the suspension by signing an affidavit declaring that nobody operated the vehicle while it was uninsured. The catch? Falsifying this statement is a misdemeanor.

I Didn’t Mean to Drop My Insurance!

If you cancel your insurance intentionally, then this article really isn’t for you. But what if it cancels by accident? What if it’s only for a few days? The DMV doesn’t really care! Here’s how it could happen to you.

Your insurance company sends you renewal notices and installment bills depending on your payment plan choice. If you miss the payment, they send you a cancel notice with a cancel date. If you don’t pay by the cancel date, they cancel your policy, you’re without insurance and they notify the state.

Most companies then allow for an “easy reinstatement” – which means they’ll accept your payment for a certain period of time and reinstate your policy. That’s nice for you. BUT…easy reinstatement does NOT mean your policy wasn’t canceled. It was. It creates a “lapse” – the period of time you were without insurance between the cancel date and the reinstatement date.

The DMV requires you to declare that nobody operated the vehicle during this lapse period. Otherwise, your registration is suspended for 3 months.

Now, let’s face it. We MUST have our cars, right? With the prospect of a 3-month suspended registration, most people are going to sign the affidavit – even if they drove the car every day during the lapse period.

What’s the solution? There’s only one I know of… Don’t get into this position in the first place! Here’s how.

How to Keep The DMV Out of Your Life

Pay your car insurance bills on time. Your policy can be canceled if your payment is late, period. And the insurance company is under no obligation to reinstate your policy… even if they’ve done so in the past.

Pay attention to everything you receive from your insurance company. It’s not junk mail! Open it. Read it. It could save you from a painful mistake. If you’re not sure what it’s telling you, we’ll help!

Switch to automatic payments. Each company offers automatic monthly deduction from your checking account. You can’t miss a payment and have an accidental lapse this

Call the Gannon Agency if you receive a late payment or cancel notice and you think you paid the bill. We’ll work on your behalf to get things straightened out… BEFORE your insurance lapses.

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