Homeowners: Do you know what mitigation is?
Mitigation: A noun meaning an action taken to reduce the severity, seriousness, or painfulness of something. “the emphasis was on the identification and mitigation of pollution from the factory.”
But what does that have to do with owning a home you may be wondering. And the explanation is in the way your homeowners insurance works.
Homeowners insurance is there to protect you financially from a “sudden and accidental” loss. For example, a burst pipe or an electrical fire. But it requires you, the homeowner, to take responsibility for “mitigating” the damage. In other words, to keep the damage of the sudden and accidental circumstance from becoming worse than it needs to be. This can be found in most policies in a section titled “Duties After Loss.”
Some of the common “duties after loss” are:
· Give the insurance company prompt notice
· Protect the property from further damage
· Cooperate with the company during the investigation
· Keep and provide records of the personal property you own
You have all seen areal photos of towns after a hurricane. Blue tarps on roofs everywhere. That is because it is the homeowner’s responsibility to try to keep the damage to the roof and the inside of the home from becoming worse. There have been situations where there was significant rain and wind after a hurricane that caused further damage to homes because the owners did not take steps to protect the parts that were not damaged by the initial storm. The secondary damage was not covered. And, yes, the catastrophic adjusters can tell the difference.
An example closer to home might be a pipe bursting under a kitchen sink. That would be sudden and accidental. But if the home’s owner did not shut off the water or call a mitigation company to dry out the house, the insurance company may not have any responsibility to do more than repair the initial damage caused by the leak. There may be an issue with coverage if a homeowner waited days or weeks to have repairs made. Water damage can quickly go from simple to extreme. Mold can start growing in less than 48 hours.
It is always better to act as quickly as possible to prevent further damage than to wait for the insurance company to tell you what to do. And document the initial damage and any steps taken to mitigate it.
Which brings us to the difference between “sudden and accidental” vs home maintenance and repair.
Let us say the water heater overflow valve explodes and soaks the drywall and floor of the water heater closet. You, as the homeowner, would need to make sure the water is no longer flowing out of the water heater first. Then you would need to call two types of home repair vendors. A mitigation company to assess the water damage and a plumber to replace the water heater. But what would a typical insurance claim cover? In general, a water heater that leaks are not covered by home insurance (it might be covered by a home warranty. The resulting damage to the drywall and floor would be covered along with the mitigation expenses after your deductible is met. This is because the sudden discharge was, sudden and unexpected. But the water heater failure is just part of owning a home and needing a new water heater.
Homeowners are responsible for maintenance of the home and mitigation of any unexpected damage. Roof repair or replacement for wear and tear, painting and weather wear and tear maintenance. Perhaps a plumbing inspection every year or two and repairs as needed. These are all preventative measures and will mitigate the need for a home repair claim.
Contributed by Victoria Sutherland, Licensed Insurance Agent