Money Matters

Yikes! Your house is flooding! What do you do next?

15 Mar 2017 by: jhurley 


By Katie Williford

As the water continues to flow, the anxiety and stress are building and you’ve probably said a few things that you wouldn’t want your children to hear. What do you do next?

Here are some tips and advice when embarking on the unexpected journey of handling water damage and the restoration of your home.

First, make sure the water to your home has been turned off to prevent any further damage. This seems self-explanatory, but in the chaos of trying to save your goods, it is easily forgotten. If the water is coming into your home from heavy rain, you have few options. Try to redirect the water using sand bags and/or tarps. Unfortunately, once water is seeping into your home from mother nature, there isn’t much to be done. If you are concerned about a big storm headed to your area, there are many preventative measures that you can take to reduce the likelihood of water seeping into your home.

Next, call the plumber/leak detection company. Try looking on Google or Yelp for a plumber, or you can ask your insurance agent for recommendations. When making your appointment with the plumber, request that they provide you with a leak detection report. This report is how your insurance company will determine coverage, should you decide to open a claim. Note that most insurance companies do NOT pay for the repair of the leak, but they will pay for the leak detection report.

The next step is to open a claim with your homeowner’s insurance company and hire a mitigation company. Your insurance agent, while keeping your policy and deductible in mind, will help you decide if opening a claim is in your best interest. Your insurance agent may also recommend a mitigation company. Note that a “preferred” or “recommended” vendor will meet your insurance company’s guidelines and expectations. They will also use your insurance company’s price list. If your agent is not allowed to make referrals, always read reviews online before hiring any mitigation company or contractor.

If you decide to open a claim with your insurance company, you will be assigned a “claims-handler” (also known as an “adjuster”). They will review your policy limits and will determine coverage on your claim. If your claim is denied, be aware that you purchased the insurance policy through your insurance agent. Concerns about what is covered under your policy can be fully examined and reviewed with you by your agent. Though your agent does not determine coverage on claims, they should be educated on general claim coverage criteria.

Most insurance companies hold the policyholder responsible to properly mitigate the damages whether or not the damage is covered. Depending on which insurance carrier you have, coverage determination can be either a short or long process but you are still expected to mitigate the damages. Negligence in repairing the damage may lead to your policy being revoked.

When choosing a mitigation/restoration vendor, here are a few tips:

  1. Make sure you are comfortable with the technician/project manager who is overseeing the restoration of your home.
  2. Request that they explain the process in detail to you. Remember, they have been working in this industry for years. For them, removing your hardwood flooring and custom cabinets is a routine, but for you, it can feel incredibly invasive. Understanding what is going to happen can make the process much smoother and more manageable.
  3. You do not have to use the same vendor for the mitigation and for the reconstruction.
  4. Always request an estimate prior to ANY work being done. Make sure you are fully aware if any changes are made to your estimate. If your claim is denied, you will be responsible for payment.
  5. Have patience. Drying equipment will be in your home for 3-7 days depending on how extensive the damage is. Once all materials in your home have met the dry standard, the repairs and build-back can begin. Putting everything back to “pre-loss” standards can take 1-3 months. Three months?! Maybe your flooring is on back order, maybe another leak is found, maybe your property management company or HOA require walk-throughs etc. If you feel that the length of time is becoming excessive, reach out to your project manager, your insurance agent, and/or your insurance adjuster. You probably have not been fully informed of the delays. This ties in with the above tips. Make sure you are comfortable with your project manager and that you are kept up to date on delays.

If you do come home to find that your water heater has dumped all 80 gallons of water into your garage or your toddler left the sink running all day, take a deep breath and know it will be okay. You are not the first person, nor will you be the last person to experience the sudden hiccups of life.

Prior to joining CCMI in December of 2016, Katie Williford worked for a mitigation and reconstruction company, and she wrote and billed the estimates for mitigation projects.

CCMI provides personalized fee-only financial planning and investment management services to business owners, professionals, individuals and families in San Diego and throughout the country. CCMI has a team of CERTIFIED FINANCIAL PLANNERTM professionals who act as fiduciaries, which means our clients’ interests always come first.
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