David began his insurance career in a family-owned independent agency in Vero Beach, Florida. In 1996 David became an instructor for the Florida Association of Insurance Agents (FAIA), where he developed a well-deserved reputation across the country as the preeminent expert in the Property & Casualty field.
Rytech asked David if he could advise potential claimants in Florida’s homeowners market on what they can do to avoid water losses or an uncovered claim.
Water losses, especially in residential homes, make up a significant percent of claims under homeowners policies. In Florida some insurers report that over 50 percent of their total number of claims are the result of water losses. Common examples are leaking water pipes, toilet or washer overflows, air conditioner leaks, and icemaker leaks.
Don’t be fooled–these claims can grow in severity and become very expensive—sometimes well over $100,000 in some homes and especially commercial structures. Insurance companies are paying out a lot of money from these claims, and some insurers have made changes to their policies that limit coverage, or even totally exclude coverage for water losses.
Each policy is different, but some common examples of coverage reductions in Florida include:
- Changing coverage from “full” water coverage to a sublimit, such as $10,000 with (at times) an option to buy a higher limit.
- Excluding or limiting coverage when a structure reaches a specific age, such as 25 or 40 years.
- Excluding or limiting coverage in a vacant structure (No personal property inside) or even excluding or limiting coverage if the structure has been unoccupied for a certain period of time, such as 14 or 30 days.
This could be a serious issue for customers who own vacation homes and do not occupy their house for several months.
What steps can be taken to help avoid a claim or a limited payment?
- Read your specific policy to see what’s covered, especially as it pertains to water losses. Contact your local insurance agent for assistance if needed; they are the best source for advice.
- If water losses are excluded or limited, ask your agent for a quote for a different insurer that might not limit water losses. The cost may be more, but better coverage can be as little as one dollar per day, or less.
- Do monthly inspections of your home–it only takes a few minutes. Check for leaks from the ice maker, washer, dishwasher, toilet, air conditioning unit, and anything else attached to a water line.
- Replace your washer hoses every five years and mark the date on a label on the washing machine or dish washer.
- Check with a plumber to determine the life expectancy of any water heater and replace it if necessary or, at the very least, have it repaired.
- Whenever you’ll be out of town for more than a day or two, turn off the water at the water meter or the handle by the house…some homes have that. Know where that cut-off device is BEFORE the loss. Turn off the water then flush the toilets and let all water faucets in the house drain empty. Make a note inside your home saying “water off” so you won’t wonder what’s wrong when you return.
David Thompson has a well-deserved reputation across the country as a preeminent expert in the Property & Casualty field. His lectures and Continuing Education (CE) training programs are delivered in a fast paced and a uniquely interesting fashion that is all his own.
After receiving his college degree from Mercer University and serving over eight years as a commissioned officer in the U.S. Army and U.S. Coast Guard, David began his insurance career in a family-owned independent agency in Vero Beach. As a licensed agent he spent a decade selling all types of insurance.
In 1996 David accepted a training and education position with the Florida Association of Insurance Agents (FAIA) in Tallahassee, Florida where he presented CE seminars throughout the country on a variety of insurance subjects. After more than 24 years at FAIA, David “semi-retired” in 2021 to open his own national independent consulting firm.
In addition to being a full-time insurance nerd, David is an avid biker and smokes the best ribs, chicken, and pork in the country.