Policy Doesn't Cover Loss Caused by Workmanship

[roboman]

I read my Erie Insurance homeowners policy and came accross this:
Under the Dwelling Coverage and Other Structures Coverage:
We do not pay for loss:

1. by weather conditions if any peril excluded by this
policy contributes to the loss in any way.
2. caused by, resulting from, contributed to or aggravated by faulty or inadequate

a. planning, zoning, development;
b. design, development of specifications, workmanship,construction;
c. materials used in construction; or
d. maintenance;
​

of property whether on or off the residence premises
by any person, group, organization, or governmental
body.
Let's say I hire a licensed plumber and he doesn't tighten a nut just right and I get a major water leak and damage to my house, does this mean I'm not covered? I called my agent and he said that's right.
Can this be true? Are all policies like this?

 

[Aram Fingal]

Yes. That is why it's important that any trades people you have do work for you are licensed AND insured.

Can this be true? Are all policies like this?

 

[joshb]

You should always ask any contractors for a certificate of insurance to verify they are covered before they start work on your house. Better to find out before hand, then after; when its too late.

 

[NCAgent]

They exclude that because it is a good way to get work done on your home for freeeeeeeeee.

Oh, the person fixing my roof didn't do it right. I guess that is what I get for 35 dollars a day. I guess I'll have my HO do it instead...

See how that can be abused easily without it? Usually insurance covers you if you screw up and excludes things that could be the fault of others.

 

[roboman]

OK. Thanks for all the replies.

Two follow up questions:
Is this new? Are all homeowners policies like this?

 

[joshb]

OK. Thanks for all the replies.

Two follow up questions:
Is this new? Are all homeowners policies like this?

No this isn't new. I don't know of a policy that isn't like this.

 

[roboman]

I just checked my Travelers policy from 2007 and it never mentioned "workmanship".

Has anyone else seen policies w/o a workmanship exclusion?

So what you really need to do then is check the contractors insurance policy, limits of coverage and also how well their financial stability is then. Seems crazy to me. I would have that that if you hired a licensed pro and had all inspections performed you were good to go.

 

[djs]

Just curious, what caused you to read this? There is usually a real question underneath these types of questions, because if you were just randomly reading your home policy, I would have expected many other questions as well.

Here's the thing, if you have a plumber come in and do work and the next day, you have a flooded bathroom from that work, the plumber is required to fix this. Just the way the real world works.

On the other hand, a year later a pipe breaks, floods the bathroom, chances are the insurance will cover this (some caveats on this answer).

On hazard insurance, just always start with the assumption that a loss has to be sudden and unexpected. A slow drip from a pipe under the bathroom sink causing damage because it drips for a year is not sudden and would rarely get covered. Lack of maintenance on the roof causing a leak is not sudden. A windstorm blowing the roof off is sudden (as long as the roof was maintained).

If you put rolled asphalt shingles on your roof and then have a windstorm and it blows them back off, oh well, that is just shoddy construction and the paragraph you quoted would come into play. Have a new asphalt shingle roof put on and the same windstorm blows it off, it would be covered. The problem wasn't the construction, it was the wind.

Dan

 

[bobson]

If that is the entire exclusion I think I'd be shopping.

The exclusion I see contains the following wording:

We do not insure for loss to property described in​

Coverages

​

​

A and B caused by any of the following.​

However, any ensuing loss to property described​

in Coverages ​

A and B not precluded by
any other provision in this policy is covered.​

The following is basically the you exclusion as you presented it. ​

Here's the deal:​

Of course your homeowners isn't going to pay for bad workmanship. That is workmanship and that is the contractors responsibility. If you hire a plumber you should hire a good one and if you don't you have to pay for someone new to come in and fix his error. ​

What you want your homeowners policy to pay for is the ensuing loss. Let's say you hire Shifting Sands Plumbing. You hire them to replace your bathroom shower. They of course screw up the plumbing behind the wall and a major leak erupts after you turn on the shower. The leak ruins the bathroom wall, the flooring, the walls and flooring underneath your bathroom. ​

Because you hired a company called Shifting Sand he doesn't buy insurance and he certainly doesn't have any assets. So you look to your homeowners policy to pay to fix the ensuing damage from the faulty workmanship, the flooring, the walls, the ceiling, the walls and flooring below. It is my understanding this would be covered by the policy I referenced. Of course the shoddy plumbing wouldn't be covered.​

It appears to me the resulting damage would not be covered under the policy roboman originally referenced (the damage to the walls, ceiling, etc).​

On a side note I agree with Roboman that I don't see the exclusion in the Travelers policy either. ​

What does everyone think of my theory? I'm not a claims adjustor and I'm certainly no attorney.​

 

[roboman]

Just curious, what caused you to read this? There is usually a real question underneath these types of questions, because if you were just randomly reading your home policy, I would have expected many other questions as well.

I had been with Geico/Travelers for auto/home for a number of years and switched to Eire two years ago so I decided to read their policy. And you're right, I do have other questions which I will post separately (definition of "unoccupied' and damage caused by pets).

PS. This forum is a great resource! Thanks for moderating it.
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Bobson,
Thanks for that post. Despite the good things I've heard about Erie, I'll be in the market for a new policy.

I don't expect them to cover the repair just the resulting damage assuming I've hired a licensed contractor and had the necessary inspections done. I'm the sorta guy who insist that all permits are pulled. Once I got a duel fuel range put in our kitchen the the installer from one of the largest appliance companies in our metro area insisted you didn't need permits(despite a new 240VAC circuit from the breaker box). It ended up you really did and made him apply for them and get them signed off.

A while back, my sister had a toilet supply tube fail and the resulting damage to floors, walls and ceilings came in at over $50,000. The insurance company covered everything and went after the manufacturer of the supply tube (widely known to be defective). So it looks like defects in material are covered just not defective workmanship. Which is what I don't understand: buy some cheap plastic pipe made in China and it's covered yet a honest mistake made by a licensed plumber isn't. Go figure.