Tag Archives: Damage First Appear

Insurance Companies and Denial of Insurance Coverage

My insurance company is asking me to tell them when the damage “first appeared.”  I really do not know, and am not sure if some damages I previously thought were “normal” are sinkhole damage.  Thoughts on this?

We have touched on this issue in prior posts but it seems to have become such an issue that we feel the need to detail this trend in a separate post.

Let this also serve in a way as a warning to homeowners involved in a sinkhole claim.

When a sinkhole claim is filed one of the first steps is for an adjuster from the carrier to come out and inspect the damage. During this initial inspection these adjusters almost always request that the homeowner submit to a recorded statement. We say that the carrier requests the statement but in reality, you are required to cooperate with any reasonable investigation or your insurance company could deny you coverage, so you are really forced to provide a statement.

During the course of these recorded statements, the adjusters often ask when the homeowner first noticed any cracks. This question has characteristically been innocent but, now it seems to take on a different role. Many adjusters are now influencing the homeowner to identify the first sign of cracking they ever noticed and then using the homeowners own words, the adjuster will unilaterally assign the date of the loss in the year the homeowner first saw even a semblance of a crack. We have even heard homeowners say their adjuster refused to continue adjusting the loss until they provided a date.

Several Serious Issues Arise

First, the limits on a homeowner’s insurance policy almost always increase as the years go by. Your policy limits now may be tens of thousands of dollars more than what your limits were several years ago. If the adjuster assigns your date of loss to a date several years ago, the carrier will only pay you the amount of your policy limits back then, precluding you from collecting on thousands of dollars you may need to repair your property.

Second, by assigning the date of loss to a date years ago, this limits the amount of time a homeowner has to file a lawsuit. As with any civil action, there is a time limit on how long a homeowner has to sue their carrier. A date of loss many years ago may automatically preclude you from filing a lawsuit if something goes wrong and it gives your carrier even more incentive to delay the claim to preclude you from suing them.

Read our tips on filing a sinkhole claim.

Have a burning question you’d like to ask about sinkholes? Let us know.