Insurance is one of those things that you pay for and hope you never need.
As a dutiful payer of car insurance, I’ve been fortunately to only ever been in one accident and it was the other driver’s fault so my insurance wasn’t financially involved.
As a dutiful payer of homeowner’s insurance, I had a pretty solid run without claims until January 2018.
It’s story time kids and today, the story is about our nearly $70,000 homeowner’s insurance claim.
I’ll start by explaining what happened, how we responded (step by step what we did to fix everything), and then round it up with some lessons learned, what we’d do differently, and how we would prepare for this better in the future. I hope you can find some value in our headache!
Table of Contents
Here’s How Our House Flooded
Every New Year’s, we rent a house in Deep Creek with a bunch of our friends. It’s four days of fun for all of our families and it’s a short two and a half hour drive away. It’s a treat to be able to do it each year (except last winter due to the pandemic) and every year, we drive home in the morning and drop the kids off at school and daycare.
That year, we did our usual. We dropped off our youngest at daycare, drove to the elementary school to drop off the oldest, and then drive home.
As I try to open the front door I notice it’s a little stuck. Weird, it’s not a sticky door. I push it, it releases, and that’s when I’m met with a face full of steam. This is bad.
The tile floor entryway is wet and I notice the door to our pantry is steaming. I immediately realize we have burst pipe, it has to be our heating system, and I run down to the boiler to shut it off and shut off its water supply.
Here’s what I saw inside the pantry:
We would later find out that the pipe burst because the insulation in that part of the roof was missing. It was poorly designed or messed with by the previous owner, but instead of baffles and insulation – there was nothing.
We only knew this because when the remediation folks showed up, they asked if I’d already removed the insulation (I hadn’t). Since the pipe sat below the insulation, the insulation would’ve been wet but it would still be stapled in place. Plus the baffles are usually Styrofoam or plastic and they weren’t there.
What we guessed is that we had a period of extreme cold (single digits) and strong winds and it’s likely the wind blew up into the space and froze the pipes. When it thawed, the system ran as normal and water poured out of the busted pipe.
What’s ironic is that while we were dealing with this, another pipe froze while we were home. I discovered it when I entered our TV room and it was far colder than normal. It was in a crawlspace and an area that lacked insulation. The pipe happened to be near a vent, designed to let humidity escape the crawlspace, and the cold temperatures froze the pipe. We were fortunate that it wasn’t near a joist so the pipe never burst.
What We Did Next After Discovery
When this happens for the first time, and I hope it never happens to you, it’s shocking. I was caught completely off-guard. We had a car loaded with stuff and a house that was flooded. What made it worse was that one of the couples at the New Year’s house was going to stay a night or two at our house after the trip!
I definitely had a sense of panic and I’m a relatively calm person. Fortunately my wife saw how exasperated I was and showed that despite my calm, she was far calmer.
The steps to fixing this are simple:
- Remediation of the water damage – try to limit the damage by removing the absolutely soaked stuff (like drywall) and try to dry the stuff that’s only wet.
- Restore and renovate the parts that were removed
The first call was to our homeowner’s insurance, which is through State Farm. Our agent, which I’ve talked to off and on for a few years, calmly walked us through the process. The first step is to call local water remediation companies to see who would be able to come out as quickly as possible.
Whenever there is water damage, your enemy is mold. Since it was the wintertime, humidity is low so you have more time than in the summer. The bad news was that it was hot water, so our house was steamed for a day or two.
I found a remediation company that was able by that night. While we waited we started cleaning up and salvaging as much as we could.
We were lucky in that pantry had a lot of stuff but much of it was pantry-type stuff – food, bottles of wine, and other goods that had no sentimental value. There were also pots and pans and dishes, stuff that was fine after a little sauna. There were some appliances that were ruined but it was ultimately just stuff.
Funny aside – the corks popped out of all our white wine bottles. The red wine bottles were still corked but they were skunked.
Later that afternoon, the remediation company showed up, started removing drywall, hauling trash to the dump, and setting up fans and dehumidifiers (“dehues” is a great name). They were a smaller outfit and the owner was a retired engineer who started the business as a way to keep himself busy in retirement. Doesn’t seem like a chill job but he enjoyed it.
We chatted a bunch over the next few days and he shared some horror stories that made me feel better about our situation. 🙂
The Insurance Claims Process
While you are remediating, the claims process starts.
I want to start off by saying I was pleasantly surprised with the claims process. I thought it was going to be challenging but it was what you’d expect from a claims process if you don’t enter it with a cynical view. It’s hard to not enter an engagement with an insurance company without a cynical view because of all the horror stories you hear.
Our process was super easy!
State Farm sent a representative out a few days after the repair just to get a sense of the damage and start the claims process. They also sent us a check so we could start paying for stuff we needed, like remediation, fairly quickly.
We walked through the entire house and looked for things affected by the flood. Since the pipe leaked for several days, it steamed our house and you could see water damage in various rooms connected to the pantry. Anything impacted was put on the preliminary claim just so it was present.
Once remediation was complete, we started working with general contractors for the restoration. State Farm got involved again as we set about a plan to reconstruct the pantry and the areas that were damaged. The general contractor worked directly with State Farm to help finalize the cost of certain items.
Finally, they were supposed to send out an agent to review the work just to make sure it was done. No one ever came out but we did everything we were supposed to so if they did, they’d just check it off.
There was also the matter of the contents of the rooms. State Farm paid out the fair market value of the contents of the house damaged by the flood. This just meant we pulled everything bad out of the pantry, took a photo, and then put it in a spreadsheet. We sent the spreadsheet along with the photos and they cut a check for everything listed.
Time-consuming but fairly trivial. I think it helped that the dollar amount of this was fairly low because it was mostly pantry supplies.
The Restoration/Rebuild Process
When the remediation crew was done and our damaged areas were in a state where they would be OK, it was time for us to work with a general contractor to reconstruct and rebuild what was destroyed. We chose from a list of State Farm-approved contractors just to make this simpler but I suspect we could’ve used anyone.
One of the surprising things, to me, about this part of the process is that you don’t have to rebuild it exactly the way it was. It just has to be close enough that it’s of comparable quality. For example, we had a finished room so we couldn’t have left it as an unfinished space.
We used this as an opportunity to make the space more functional by moving the washer/dryer and the sink, we opened up the doorway so it was wider, moved a few outlets, and other minor things that made our life easier.
The biggest pain in all this was replacing the hardwood flooring in the kitchen. The water damage soaked through the floor and the boards had “cupped” – or raised on the edges of each board. The remediation crew had tried dehumidifiers but they weren’t hopeful (and it didn’t work). We lost the use of our kitchen for a few days as they did the work, which was annoying.
What was fascinating is that the loss of our kitchen enabled us to get corporate housing as part of our claim. We opted to stay in our house and deal with no kitchen for a few days since it would be less disruptive for our kids and their schedule. We did, however, order takeout a bunch (can’t cook without a kitchen!) and we claimed all of those meals.
The restoration process was pretty routine too. We’ve never had any major work done on the house and it was interesting to see how general contractors worked. Basically, the general contractor manages the project and they charge 20% – 20% on labor, 20% on materials (this can vary). Our insurance was paying for this, which general contractors love, so weren’t super discerning.
In reality, we are still paying because we keep anything that we don’t spend, as long as we make the house whole again. We could’ve been pickier but it comes at little cost to us.
Many general contractors have their in-house people for certain common tasks but they outsource a lot of jobs – such as flooring. For our flooring, we got a quote from their favorite subcontractor and a few others. Their contractor turned out having the best bid.
As an aside, we also used this time, with all these workers in our house, to carpet our basement with one of the companies that came out to give us a quote on the kitchen. It had linoleum flooring that was cold in the winter (it’s not a climate controlled space) and we replaced it with Berber carpet that helped the basement’s whole look and feel. That proved to be a lifesaver during the pandemic.
The restoration process was both fast and slow. Our pantry was done in just a few weeks. The flooring took just a week. Various finishes, paints, and smaller jobs kind of dragged out a little bit. We were 90% done by the middle of March but it took until about the first week of May to be 100% complete.
Little things here and there, but that’s not uncommon.
Cashing the Claims Check
We received several checks – the first “advance” to help pay for remediation and other costs (like the plumber to fix the pipe), the second “real” check that covered what they initially approved, the “contents” check, and a final check to settle things.
Each time we needed to go to our mortgage’s bank (Wells Fargo), meet with a representative, bring our claims forms, and get a bank rep to sign the check before we could deposit it. This was annoying but, as the Wells Fargo representative explained, they have an interest in the house since it is collateral for the mortgage loan.
The whole point of this is that they want to know that the house is still in good condition. They had to make sure that I didn’t cash the check and then not repair the damage. This is when I learned that it just needs to be fixed back to close to the original condition. The pantry needs to be a pantry. The floors of the kitchen need to be there. Stuff like that.
It was also straightforward but just meant we had to visit Wells Fargo and wait each time to get the signature.
Did Our Insurance Premium Go Up?
I expected our premiums to go up after this but it wasn’t a big change. The premium went up by around 14% for the next annual bill in 2018 and then in 2019 and 2020 the premium went back to roughly the same as 2017’s bill.
A lot of factors go into a homeowner’s premium but I felt like this claim didn’t make a significant difference. It’s quite possible rates went down and our premium didn’t but given the massive size of this claim, it doesn’t appear to have had as massive an impact on our premium.
How to Pre-Prepare for This
I hope you never have to deal with a flood.
But as I mentioned in my post about emergency plans, the best time to plan for an emergency is before the emergency happens. What’s funny about a flood is that something similar had happened before.
We are on well water and the pipe coming into the house had somehow burst. We think it’s due to the house settling but no one really knows for sure.
In that case, the water flooded into an unfinished crawlspace (the same one with the frozen pipe mentioned earlier) and we were home. We discovered the flooding because our water pressure disappeared and when I went into the basement, I could hear the water.
When we called a local water remediation company, the representative said that we should just pump out the water (we used our pool cover pump), rent a few high volume fans and buy a dehue. We used that dehue on the pantry flood. 🙂
What would you do if something flooded? Set up the plan now so instead of trying to think of what you’d do, you just follow a checklist.
What Would I Do Differently?
I’m 99.99% happy with how everything turned out but there is one thing I’d do differently.
When something like this happens – it’s extremely jarring. There’s a sense of panic. There’s a strong pull to get everything the way it was before it happened. I think I had a tendency to make decisions with that bias.
We redid our pantry and definitely made some smart choices moving stuff around, but part of me wonders if other areas of the house could’ve been improved as well. I think my approach was still a little too panicky, if that makes sense.
I asked my lovely wife if there were things she would’ve done differently and she thought the corporate housing would’ve been better when they were doing the flooring. She was pregnant with our third and the dust from the flooring work got everywhere.
There is one thing I do wonder – we didn’t get much push back from State Farm. I’d like to think that State Farm is just easy to work with but I sometimes wonder if we should’ve been more aggressive in what we claimed? As I think back though, I’m not sure what we could’ve added that we didn’t ask for.
The only big thing they declined were some windows that we felt were clearly affected but the windows were so old that you could’ve said the fair market value was very little anyway. They had a point – how much are 40-year-old windows worth? Not much. 🙂
How We Will Help Prevent This From Happening Again?
There’s no way to 100% prevent this from happening again but a few things are different about our house now.
First, we have security cameras inside and around the house. They have temperature monitors that can notify us when it gets too hot. We had cameras before but they were only motion-based and 99.9% of the time, all it caught were little bugs that fly around at night.
We got a series of Blink cameras that sit in various parts of the house. They can tell us the temperature of the room they’re in but they don’t notify us about changes.
Another change is our thermostats are now ecobee3 lite thermostats, free from our electricity provider, BG&E. These have temperature and humidity sensors and they will also warn us if humidity is too high. If we had these at the time of the flood, we would’ve been notified of unusually high humidity.
If we’re away and something happens, we can at least call a neighbor to swing by and shut off the water (and the pumps!). While it’s not ideal, a little leak is better than a massive one.
I hope you enjoyed our fun little adventure dealing with a burst pipe and a $69,425 homeowners insurance claim! 🙂