Homeowners Policy Limits – Were They Really Paid in Full? PT. 1
By Jordan Mejeur, Esq.
All too often I see insurers cry that they’ve paid policy limits and their liability is exhausted on a homeowner’s insurance claim. And all too often the insurer’s unilateral belief that it has exhausted its liability is patently incorrect.
One provision notably sticks out as an overlooked additional coverage when the insurer is adjusting a residential homeowner’s insurance claim: Debris Removal.
I use the phrase “additional coverage,” because usually that is in fact what it is – an additional coverage on top of the limit of liability that the insurer claims to have exhausted.
Generally speaking, most standard Florida homeowner policies have some form or fashion of the following debris removal language:
Additional Coverages: Debris Removal
We will pay the reasonable expense you incur for the removal of:
(1) Debris of covered property if a peril insured against that applies to the damaged property causes the loss; or
(2) Ash, dust or particles form a volcanic eruption that has caused direct loss to a building or property contained in a building.
If the amount to be paid for the actual damage to the property plus the debris removal expense is more than the limit of liability for the damaged property, an additional 5% of that limit is available for such expense (emphasis added).
So what does this mean?
It means that if you have a covered loss that requires your removal of debris, you are entitled to additional benefits on top of the applicable policy limit. For example, let’s say your main dwelling limit is $100K (usually titled “Coverage A”), and the cost to repair your damaged property resulting from a covered loss is – coincidentally, because it’s my hypothetical – $100K.
In addition to the $100K in repairs for your property damage, you or your contractor incurs another $2K for removing debris from the property. If your policy contains the above-referenced debris removal provision, then you are entitled to the extra $2K on top of the policy limit of $100K, since 5% of $100K = a $5K allowance for incurred debris removal expenses.
I’ll expand on subsection (2) of the debris removal provision during the next volcanic eruption in Florida.
This blog discusses general policy language and scenarios, however, each claim and case are different in their own respect. If you have questions about your insurance policy, do not hesitate to contact your insurance agent to verify that you’re properly insured.
If you need assistance or have questions about an insurance claim, call one of our experienced attorneys for a free consultation.
Jordan Mejeur, Esq.
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