Homeowners expect their home insurance to cover any type of accident but that’s no longer true as each year it seems like there are more exclusions, and then for some things you have to buy an extra rider. Even more confusing is when you have work done by a contractor and there’s an accident while the work is being done … or harder to determine, shortly after the work was conpleted.

I recently a story about a friend who’s pipes burst and another post shows how to protect pipes in cold weather. This friend lives in another state but called me for advice given my broad base of knowledge about construction, homes, common problems. He wanted insight into the tangled web of insurance claims.

Who’s Insurance Covers What?

You see the furnace was only 3 months old so anyone would assume it was under warranty. The company who installed the furnace had to make several trips to the home to identify the problem(s), ordered parts and ultimately installed everything at no cost to my friend.

Unfortunately there are still significant costs related to the secondary problems caused by a plumbing failure, in this case burst pipes and the damage caused by the water flooding the home and damaging the flooring, walls, furniture, etc. His home owners insurance is covering everything except for his deductible that comes out of his pocket?

The question is why is this homeowner paying a deductible for a new furnace which failed? and why is his insurance claim record marred due to a failure on the part of a manufacturer and/or installer? That’s why I got the phone call. Many of my customers call for advice on how to handle problems and some involves insurance claims. Very few home owners have experience dealing with insurance companies so the first time they file a claim they’re at a loss as to what to do.

Owning a handyman has taught me quite a few lessons about negotiating with insurance adjusters (another article coming soon). This situation was different as all of our work is done by employees, so I’ve never dealt with a problem related to a subcontractor before. That’s not the end of the story as every good business owner has a network. I called a builder in my network who works primarily with subcontractors. Here is the advice I received from him.

Which Insurance Company Pays?

• An insurance adjuster needs to review the problem and make a determination as to where the problem occurred.
• A faulty furnace would be the responsibility of the manufacturer, although an installer who sells you the unit is making a profit on the furnace and should include some type of warranty just like my handyman company does when we supply the materials. You see the heating company has a lot more experience, and presumably clout with the manufacturer, than an individual home owne and they should be able to recover their costs for replacement parts and potentially labor to correct the problem.
• An installation problem would be the responsibility of the installer, and their insurance (what is known as general liability coverage) would be responsible for covering the added costs of repairs they cannot perform like plumbing, repairs to home’s structure (floors, walls, etc) and furniture.
• The home owner’s insurance can provide temporary coverage, and presumably they might need to pursue liability on behalf of the homeowner. This is important as the home owner should not be penalized for an accident outside their control (they didn’t buy or install the new furnace). We’re all too familiar with car insurance rates being raised after we get into an accident, and we don’t want to see a similar situation here.

Author: tinagleisner: Tina Gleisner is passionate about helping women home owners LEARN about their homes, CONNECT with home professionals committed to delivering quality home products, and CREATE homes that support their lifestyle. Leveraging her experience as the owner of a handyman business, Tina created the Assn of Women Home Owners at www.HomeTips4Women.com.