Expensive Lesson in Homeowner's Insurance

by William Dowd 1/20/12

After 30 years of claim free, on time premium payments, you can talk yourself into a false confidence that your homeowner's insurance is protecting you in the event of damage to your home.  I did.  I even paid extra for full replacement value coverage to avoid any issues with depreciation. And then came Irene.

(photo courtesy of Wikipedia)

Back in August, at the height of Hurricane Irene, a large tree in my yard came down on my garage and crushed it.  Nobody was hurt, and it was just a garage, so I counted my blessings and phoned in a claim to my homeowner's insurer, MetLife Property and Casualty.  After a brief conversation with a very pleasant phone rep, I was assured that I'd be hearing from an adjuster.

I won't torture you with the series of early painful mistakes and delays caused by MetLife that I chalked up to the huge number of losses and claims up and down the eastern seaboard.  Eventually, a competent adjuster arrived and surveyed the damage.  I won't deny that, for a number of reasons, having the garage replaced was not a bad thing, and I was looking forward to an expeditious settlement of my very obvious severe damage.

To my shock, the adjuster spent the first 15 minutes telling me all the things for which I would NOT be covered:
    - Making the wall between my garage and house fire resistant? Not covered.
    - Installing heat detectors in both garage bays? Not covered.
    -Installing required fire/smoke/CO detectors in my house? Not covered.
    - Installing six feet of snow and ice shield on the roof? Not covered.
    - Building the roof structure to conform to current codes? Not covered.

When I exasperatingly asked why not, I was told that I did not have a "Code Update Rider".   It seems that standard homeowner's policies - at least those written by MetLife - only cover the homeowner to rebuild what is there, even if what is there does not comply with the current building codes.  If you want to be covered to rebuild to current building codes, you need to buy an additional cost rider - the Code Update Rider.  I check the policy language - all forty pages of it - and sure enough, I was only covered to put back up what was there.

I tried to reason with the Company by pointing out that all the requirements of the current building code are intended to make the building safer and less likely to sustain damage in the future.  I pointed out how that was in our mutual best interest.  They said maybe so, but I'm still not covered.  So I'm out of pocket about $4,000 I wasn't planning on spending to repair my garage.

I offer my experience only so that as you review your own insurance coverages, you check this out.  I later found out that the rider costs $78 per year.  What's interesting is that no one from MetLife ever even told me there were riders available, and how much they cost.

The insurance company commercials on TV try to reassure us how well we're protected in the event of a loss. I've learned to trust them a little less than I did.  I urge you to look into your policy, and avoid my mistakes.
 

Posted in Neighborhood, Comments.

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