Closed Claims, Open Damage: A Costly Oversight for Homeowner

Many homeowners go the route of pursing first party legal action against their insurance

companies after a claim dispute, only to later decide that they no longer wish to move forward

for various reasons. What homeowners often do not consider is that when a claim or a lawsuit is

abandoned, the property damage remains; this can be a costly oversight, creating a hidden risk

for homeowners who assume that ending the legal or claims process also ends their legal

exposure.

 

That risk becomes particularly significant when future damage occurs to a previously affected

area of the property. Because insurance carriers routinely assess whether any newly reported

damage is truly new or simply a continuation of a previously reported (or unreported) condition

its most prudent to make repairs following any closed insurance claim. If the earlier damage

remains unrepaired, the insurance carriers often argue that the damage is “preexisting” and falls

directly under a policy exclusion. This argument is bolstered by the fact that any failure to make

reasonable repairs to mitigate further losses is also a subsequent bar to any homeowner insurance

claim. It matters not that the claim was previously reported or that the damages worsened over

time.

 

To protect against these outcomes, homeowners should always make some sort of repairs related

to the previously claimed damage and carefully document these efforts by way of photos,

invoices, reports, etc. That way, there is a well-established before and after representation of the

property should any future losses arise. It is important to note that even partial or temporary

repairs are sufficient to demonstrate that the prior damages were adequately, and appropriately

addressed and that reasonable, responsible efforts were made to mitigate any future or worsening

conditions.

 

Consulting with a professional before walking away from a claim can help homeowners to

identify the appropriate steps to take to ensure that big risks aren’t lurking in the balance of a

future claim, resulting in unintended consequence. Taking the appropriate measures not only

strengthens future claims but also preserves coverage, credibility and long-term protection for

the property.

 

Our Attorneys here at the Cohen Law Group are dedicated to answering any questions you may

have. If you find yourself in a legal bind, call one of our experienced attorneys for a free

consultation. We are ALWAYS happy to help!