It’s no secret that tropical storm Sandy caused extensive damage to thousands of homes and heating systems.However, “what to do” as a result of Sandy’s damage might as well have been a secret because many people didn’t have a clue and in their haste to get their, or their customers, heating systems operating, they exposed people to additional problems in the future.
NORA quickly stepped up to the plate and put together a “Flood-Damaged Oil Appliance Checklist” that was distributed throughout the industry and which appeared on the pages of this magazine*. Nora’s checklist has proven invaluable in helping the Industry restore heat and hot water to their customers as quickly as possible.
Unfortunately, many contractors haven’t seen the recommendations—or if they have, they haven’t followed them. In addition, some areas have had what we used to jokingly call “Christmas Contractors,” individuals offering to get damaged heating systems working for a flat fee. (Christmas contrac
tors are those people who get a screwdriver, flashlight and adjustable wrench for Christmas and then decide that they can fix anything.)On the gas side, we’ve seen people simply light the pilot light of a unit that was under water and then walk away once the unit starts. On the oil side, there are some who remove water from the tank, hit the reset and hope for the best. As NORA’s checklist clearly demonstrates, after exposure to waste water, every unit MUST be thoroughly checked, several components must be replaced and the burner must be properly adjusted to manufacturers’ specifications.
In addition, special attention must be paid to a major component that is often overlooked in these situations—the oil t
The NFIP advises that flood insurance does not coverage for the following:
WHAT’S NOT COVERED
Most self-propelled vehicles such as cars, including their parts More details of what is provided are available by downloading the NFIP Summary of Coverage .
My furnace got water damage in it, so the electronics go wet, and the insulation got wet. My service company says they can replace the ruined parts for $500 or I can get a new unit for 2500. Who decides what I should do?
It is important before undertaking any action to repair or replace your property and/or damaged items that you speak with your insurance agent, your insurance company and/or the NFIP. Depending upon the type of policy you have, the insurance company may only pay to repair, not to replace the furnace. Working with your insurance agent and/or insurance company will assist you in obtaining the maximum coverage available under your policy.
However please note that the location of the furnace may determine whether or not there is coverage under a flood insurance policy. While furnaces are considered covered items under the building property coverage, coverage limitations may apply if the furnace is located in a basement or a crawl space. You must look at your policy to determine whether or not coverage will be provided.
My boiler was ruined by the saltwater. It is old and I would like to get a new high efficiency boiler, will insurance pay for a better boiler than I have?
Neither your insurance company nor the NFIP has an obligation to provide you with a boiler that is better than the one you currently have.
My furnace got salt water in it, and the service technician said he could fix it, but because of the salt water, it will begin to corrode. Can I get it replaced instead of fixed?
The flood insurance policy should pay for a new furnace depending upon the location of the furnace. However, prior to replacing, rather than repairing the furnace, you should discuss with your insurance agent, your insurance company and/or the NFIP in order to ensure coverage especially if you cannot afford the new furnace if coverage is not provided.
I need new duct work, and a new furnace and it is going to take at least a month to get it all repaired. Can I go to a hardware store and buy temporary heating devices, and will insurance pay for it?
It is important before undertaking any action to repair or replace property and/or damaged items that you speak with your insurance agent, your insurance company and/or the NFIP. Most insurance companies will allow insureds to make temporary repairs. When there has been a catastrophic event, some insurance companies may even offer advance payments on covered claims so that restoration activities can begin. If such is the case, then you must keep detailed records on how any money is spent. Even assuming that you do not receive a lump sum from the insurance company for certain repair costs, detailed records must be kept to support any claim.
My oil tank was moved by the flooding. It is still in good shape, but the oil company now says I should get it strapped down. Is that something insurance will pay for?
Insurance coverage for fuel tanks, including the fuel oil, damaged due to a flood is provided in the building property coverage of the NFIP flood insurance policy. Therefore, your flood insurance policy should provide coverage to repair and/or replace the fuel oil tank.
I need a new furnace, and the service company is ready to do the replacement. What do I need to have my claim submitted? Do I have to save the parts, or can the receipt from my service company be good enough? Should they say anything special on receipt?
It is your duty to prove the loss. Therefore, if the furnace must be removed or repaired prior to an insurance adjuster examining the damaged furnace, be sure to take clear photographs of the damaged property and save all receipts. Most insurance policies mandate that all damage be inspected prior to any damaged items being removed and/or repaired or replaced. However, due to the devastation caused by Sandy, some states such as New York have ordered insurance companies to waive on-site inspections prior to accepting the claim and to accept a homeowners’ evidence, such as photos and videos of the damage, and not to deny any claim based on the removal of an item. If repair of a furnace is necessary in order for you to remain in your home, most policies will allow you to make temporary repairs of the damage. However, it is best not to dispose of any property until an insurance adjuster has reviewed it for your claim. In addition, it is always best to talk with your agent, your insurance company and/or the NFIP about critical repairs that need to be made before you start any such repairs.
The gas lines into my neighborhood will not be replaced for months, and I need heat for this winter. If I convert to oil, will insurance pay for the new tank, and new equipment?
No. Most insurance policies only pay for your property which has been damaged. If you do not own the gas lines and/or the damage which has occurred to the gas lines is being repaired by the gas company, neither a homeowner insurance policy nor a flood insurance policy will pay to install equipment necessary to convert to an alternative fuel source.
There are so many people giving me different answers on insurance, my broker, the telephone answering system for my insurer, and my neighbors. Who should I listen to?
You should feel confident in listening to the advice of your insurance company, the NFIP or one of its authorized representatives such as an agent or an adjuster. If your insurance agent or insurance adjuster has provided advice which you believe is contrary to what your insurance company has told you, then you need to confirm with your insurance company prior to relying on the advice. Alternatively, be sure to take detailed notes regarding information provided by any authorized representative of the insurance company in the event a conflict arises in the future. Ultimately the insurance company has final decisions on insurance coverage.
If the insurance carrier says they won’t cover a loss, is that it, do I have anybody else I can ask?
If your insurance company advises that a loss is not covered, be sure to obtain the coverage denial in writing. The letter is particularly important if you have a flood insurance policy through the NFIP as the NFIP will not consider any coverage until it receives a letter of declination from your homeowners’ insurance carrier. In addition, any assistance to which you might be entitled from FEMA cannot be reviewed until FEMA has confirmed that you have no available insurance coverage as it is a market of last resort.
If you believe your insurance company has wrongfully denied your claim, most insurance policies have procedures you can follow towards resolution of your claim. In addition, you can contact your state insurance department for assistance. While typically insurance departments do not become involved in claim matters, states which have been most devastated by Sandy have set aside special resources through various state insurance departments to assist insureds in understanding coverage which will be provided to them and alternative where there is no coverage.
If the insurance carrier says they won’t cover a loss, should I consider hiring a lawyer. How can I find a good lawyer to help, and one who knows what to do?
Prior to hiring a lawyer, we suggest you document any conversations with your insurance company and request reconsideration of the claim denial. If the issue is not denial of an entire claim, but rather the amount it will pay or whether a particular item is covered, then you should consider using a public adjuster. A public adjuster is an adjuster who works for you and not the insurance company. Public adjusters seek to act as your advocate. Since they are paid a fee based upon a percentage of the claim settlement; you must consider whether the adjuster’s services are worth the discounting of your total claim. Many times your insurance agent is able to provide assistance in processing your claim and serve as your advocate as well without the increased cost associated with a public adjuster.
If the insurance company still maintains a denial which you believe is wrongful, consulting a lawyer who has experience in insurance can assist you in reviewing your insurance policy against your losses and provide an opinion on whether or not coverage may be provided. Lawyers can also assist in negotiating on your behalf with the respective insurance company. There are a number of local lawyer referral services, including local bar associations which can be of assistance.
If I hire a lawyer because I was denied coverage, and the insurance carrier changes their mind, will they pay for the lawyer fees?
Insurance companies are not obligated to pay for your lawyers’ fees or those of any expert you may have hired to assist with your claim. However, a lawyer can attempt to negotiate such with your insurance company. If your claim finds itself in court and you prevail on the coverage issue, then you will most likely recover your attorney’s fees from your insurance company as in many states the law requires that the insurance company pay its insured’s attorney’s fees if an insured hired an attorney to initiate coverage litigation and the insured was successful in obtaining a declaration by the courts of insurance coverage.