On September 13 the entire Northwest Indiana area was flooded. Our home sustained significant damage in the basement as the streets in our area were completely flooded due to three days of extremely heavy rains, and our sump pumps could not keep up with the downpour.
We submitted a claim to ANPAC as we have an endorsement to our homeowner's insurance policy that affords coverage for water backups in sewers or drains. No problem, received our $2500 check for this. Well, needless to say that we lost practically everything as we had just remodeled the basement with new carpeting, panelling, etc.
We got it cleaned up only to have another rain the first week in November. We decided that we were going to have to do some extensive work and the smell was so bad that we decided to move into the home we had purchased (across the street) in August as rental income until we could get it gutted and repaired.
Well to make this story shorter, we also received more water in the basement in February and April. This is when I decided that I would file a claim with ANPAC using our "Loss of Use" Coverage which pays a monthly maximum of $3,484.00 since we were out of our home and we were subjected to the additional living expenses. I pulled out my policy to check to see if there were any stipulations to using the "Loss of Use" coverage and found there were none. Under Coverage D - Loss of Use, it reads as follows:
Subject to a montly maximum of 2% of the Coverage A limit of liability, the limit of liability shown in the Declarations for Coverage D is the total limit for al the following coverages:
1. Additional Living Expenses. If a loss covered under this Section makes the residence premises uninhabitable, we cover any necessary increase in living expenses incurred by you so that your household can maintain its normal standard of living for up to 24 months. Payment chall be for the shortest time required to repair or replace the premises; or, if you permanently relocate, the shortest time required for your household to settle elsewhere. This period of time is not limited by expiration of this policy.
2. Fair Rental Value. If a loss covered under this Section makes that part of the residence premises rented to others or held for rental by you uninhabitable, we cover its fair rental value. Payment shall be for the shortest time required to repair or replace the prt of the premises rented or held for rental, but not to exceed 24 months. This period of time is not limited by expiration of this policy. Fair rental value shall not include any expense that does not continue while that part of the residence premises rented or held for rental is uninhabitable.
3. Prohibited Use. If a civil authority prohibits you from use of the residence premises as a result of direct damage to neighboring premises by a Peril Insured Against in this policy, we cover any resulting Additional Living Expense and Fair Rental Value loss for a period not exceeding two weeks during which use is prohibited.
We do not cover loss or expense due to cancellation of a lease or agreement.
This is all that is listed under the Coverage D - Loss of Use portion of my insurance policy.
Therefore, after reviewing this I contacted my agent, Alice Jones, on May 13, to find out if we qualified for using the coverage. Linda, her assistant told me I needed to contact the Claims Depart. And speak with Julie Stanford Bennett as she had handled our last claim. I immediately contacted Julie and gave her the details of what had happened and she took the information and asked me only one question, "Were we still making our mortgage payments?" I answered yes, and she proceeded to give me my claim number.
On May 15, I was contacted by ANPAC Senior Claim Adjuster, Dave Bowmaster who told me that an Adjuster from a company called "Sweet Claims" would be contacting me to set up an appointment to view the damage. Later that day I received a call from Sweet Claims stating that they needed to set up an appointment to see my water damage since I had filed a claim with my insurance company for water backup, and asked if they could come that evening because they just so happened had an adjuster in my area. I agree and set the appointment for 3:00 PM that same day.
After hanging up, I realized that the lady from Sweet Claims had mentioned I had filed a claim on water backup with ANPAC. I immediately called ANPAC Senior Claim Adjuster, Dave Bowmaster and asked him how they had my claim classifed and he stated that it was listed as "Loss of Use". I then asked him why an adjuster was needed, and he stated that they had to see what the cause of the loss of use was, but it would not be a problem because I had the Endorsement added to my insurance for water backup of sewers and drains coverage.
The adjuster from Sweet Claims came out, took pictures, and left. There was very little conversation with this man, and he stated that the insurance company would contact me as soon as he filed his report.
On May 28 I received a call from ANPAC Senior Claim Adjuster, Dave Bowmaster stating that my claim was denied because "Loss of Use" coverage applies only to fire, hurricane, tornadoes, and perils such as that. I told Dave that the policy does not stipulate any type of criteria must be met. He stated that it does and that my claim was being denied. I requested at this time that he provide me with the name of his supervisor and he stated that he was out of the office. I told him that I did not ask where he was but whom he was. He stated that his name is Dean McCall. I then asked for his telephone number and he replied 800-333-2861 x 2526 and stated that he was out of the office until the week of June 7th.
I attempted to contact Dean McCall and his voice message stated that he was out of the office.
On June 6, I received a letter from ANPAC Senior Claim Adjuster Dave Bowmaster which reads:
Dear Mr. And Mrs. R*,
We have received and reviewed a report from the adjuster who inspected your home on our behalf.
The adjuster reports that water had backed up into the basement of your home through the sump pump well on at least four occasions within the last year and that you had moved out due to the damage. He has indicated that the first water backup losses occurred in September of and subsequent backups occurred in November of February of and again in April. The adjuster reported that repairs from the first water backup have not been made and you do not intend to make repairs until you are able to resolve the problem that is causing the water to back up into the house. He has reported that you have moved into your rental house and are seeking compensation for rent for living in that house. Loss of Use Coverage is detailed on Page 4 of your policy and reads as follows:...
Dave Bowmaster has included the portion of the policy on Coverage D - Loss of Use (that I have previously noted above) but after the last sentence in Coverage D about what they do not cover, he has added,
"Loss of use provides coverage when a loss covered by the policy makes the residence uninhabitable. The policy does not afford coverage for a water backup and, therefore, coverage is not afforded under the policy for loss of use related to a water backup."
He further writes the following:
With regard to water which backs up through a sump pump well, the policy reads as follows:
Section I - Exclusions
1. We do not insure for loss caused directly or indirectly by any of the following. Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss.
C. Water Damage, meaning:
(1) flood, surface water, waves, tidal water, overflow of a body of water, or spray from any of these, whether or not driven by wind;
(2) water which backs up through sewers, drains, sump pumps, sump pump wells, or similar systems; or
(3) water below the surface of the ground, including water which exerts pressure on, or seeps or leaks through a building, sidewalk, driveway, foundation, swimming pool, or other structure.
Your policy does have an endorsement attached to it that affords coverage for water backups in sewers or drains. The Limit of coverage under the endorsement is $2,500. We issued payment to you for the $2,500 Limit for the backup that took place on September 15.
I fail to see how my claim can be denied when my policy DOES NOT state any certain criteria must be met to be eligible to file a claim for Loss of Use, nor does it state, as Dave Bowmaster claims it does, that it only pertains to certain disaster perils.in addition, the endorsement to my policy for the water backup does not state that the endorsement does not afford me the opportunity to file a claim for Loss of Use coverage.
The Water Backup or Sewers and Drains Endorsement to my insurance policy read as follows:
"For an additional premium, we will provide up to an annual aggregate limit of $2,500 for all occurrences in any one policy year for direct physical loss caused by water which backs up through sewers, drains, sump pump wells, or any device for the removal of ground water.
Additional definition
"Basement" means any area of the building having its floor subgrade (below ground level) on any side.
Special exclusions
1. Under Exclusion 1. C. Water Damage, Item (2) is deleted. However, all other perils listed under 1. C do apply.
2. The following exclusions pertain to this endorsement only. There is no coverage:
A. If the loss is caused by your negligence, or
b. For the replacement value, actual cash value or actual replacement of basement flooring materials. Flooring materials include, but are not limited to carpeting, carpet padding, linoleum, tile, and wood."
I have no intention in letting ANPAC get away with this play on policy words. I have been a customer since 1989, having filed only two claims this entire time. You pay your insurance premiums so you are protected when disaster happens and they are supposed to fulfill their obligation by honoring your claim without trying to play word games. You can bet that after this policy period is over, I will definitely be looking for an insurance company that will deliver what they promise!!!
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