Unpermitted deck repairs - would home/excess liability insurance cover injuries?

[Jaycee10]

Just a hypothetical here.

My primary residence has a large multi-level deck that was constructed when the house was originally built many years ago. Over the years, I have had to upkeep it due to normal wear and tear like rotting.

Several years ago, I did a few significant repairs (replaced rotting handrails, replaced some structural columns and beams, and did a small expansion). At the time, my contractor stated that we didn't need permits for those types of repairs. Now I'm finding out he was wrong and permits were indeed required. Some of our city's building codes have changed over the years, and the repairs that he did at the time were based on old codes. While I believe the work is structurally sound, it would not have met code requirements during the time that he made them.


Now the hypothetical question that keeps me up at night: Is this something that could eventually result in a denial of coverage by the insurance company? For example, suppose I have a party and a bunch of people are on the deck and it suddenly collapses resulting in severe injuries. After an investigation, they find out the deck wasn't up to code and work was done un-permitted. Would the insurance company have grounds to deny claims based on my negligence? Could I lose everything?

A few additional details. I have MetLife Grand Protect with homeowner's and an excess liability coverage of 1M. I've read through the policies and searched online but can't really find anything definitive. I'd appreciate any thoughts on the matter!

 

[Markthebroker]

..it would not have met code requirements during the time that he made them.

After an investigation, they find out the deck wasn't up to code and work was done un-permitted. Would the insurance company have grounds to deny claims based on my negligence?

If you were the insurance company, wouldn't you feel you had grounds to deny the claim?

 

[adjusterjack]

Would the insurance company have grounds to deny claims based on my negligence?

Your liability insurance covers you FOR your negligence. So, no, the claim wouldn't be denied because you were negligent. (Sorry Mark, you're wrong there.)

Though you could be non-renewed because of the loss, thus driving you into a high-risk insurance classification, making your insurance incredibly more expensive.

The other problem is that your homeowners liability limit isn't likely enough to cover injury or death of "a bunch of people." Judgments in excess of your liability limit could very well bankrupt you and you could end up losing everything that way.

 

[InsCommentary]

Jack is correct. Unless there is something very specific and unusual in the HO and/or PUP policies, the insurer likely has no basis to deny the claim absent absent misrepresentation, fraud, etc. by the insured. If they ask about this, the insured must not conceal any material fact; otherwise, it’s up to the carrier to underwrite the account. If a claim were to happen, the insurer might nonrenew and they might surrogate against the contractor if the statute of repose or limitations has not expired.

 

[Jaycee10]

Thanks for the replies everyone. What you're saying is what I thought, but I do seem to get conflicting information about this topic. In addition to some of the links that MarkTheBroker had pointed out, I keep reading articles like the following:

3 Major DIY Mistakes That Can Affect Insurance - InsuranceQuotes.org

"Equally as important, permits are usually going to be required by a homeowner’s insurance company. For example, if you install a wood stove but fail to get a permit and have a licensed contractor complete the work, your insurer would automatically deny any resulting claims 99% of the time. Without a permit and licensed contractor, the insurer considers that the homeowner is being negligent, and insurers never pay out claims resulting from negligence."

Anyone care to chime in on that above opinion? It seems to contradict what you guys are saying.

Also, in reviewing my current policy, I did come across a "Losses We Do Not Cover" section under the section for “LIABILITY, MEDICAL EXPENSES AND OPTIONAL COVERAGES ”:

Losses We Do Not Cover

1. We do not cover loss or damage to the property which results directly or indirectly from:

• wear and tear;
• gradual deterioration;
• depreciation;
• insects or vermin;
• corrosion, rust, dampness, dryness, cold or heat;
• fungus and mold;
• mechanical breakdown;
• faulty construction;
• an original defect in the property; or
• error, omission or deficiency in design, specifications, workmanship or materials.

This is where it gets confusing for me. It would seem based on any of those last 3 items that my hypothetical scenario could fall under losses not covered. Am I misunderstanding?

 

[InsCommentary]

Sadly, this is one of the most ignorant things I’ve ever read:

"Equally as important, permits are usually going to be required by a homeowner’s insurance company. For example, if you install a wood stove but fail to get a permit and have a licensed contractor complete the work, your insurer would automatically deny any resulting claims 99% of the time. Without a permit and licensed contractor, the insurer considers that the homeowner is being negligent, and insurers never pay out claims resulting from negligence."

InsuranceQuotes.org and other similar web sites are not reputable sources of insurance coverage information. It’s caveat emptor on the Internet.

 

[Jaycee10]

Thanks INSCommentary - that's what I kinda figured - and there's quite a few other similar articles out there. Sometimes it seems like we're living in the mis-information age.

Do y'all have any thoughts about the section in my policy under "Losses we do not cover."? To me it sounds like they wouldn't pay for replacement of property damaged in those cases? But it seems strange that it is located under the "LIABILITY, MEDICAL EXPENSES AND OPTIONAL COVERAGES " section.

 

[InsCommentary]

Hard to say without looking at the policy in its entirety. What does your agent say?

 

[adjusterjack]

"Equally as important, permits are usually going to be required by a homeowner’s insurance company. For example, if you install a wood stove but fail to get a permit and have a licensed contractor complete the work, your insurer would automatically deny any resulting claims 99% of the time. Without a permit and licensed contractor, the insurer considers that the homeowner is being negligent, and insurers never pay out claims resulting from negligence."

I spontaneously broke out in gales of laughter when I read that.

Do y'all have any thoughts about the section in my policy under "Losses we do not cover."? To me it sounds like they wouldn't pay for replacement of property damaged in those cases? But it seems strange that it is located under the "LIABILITY, MEDICAL EXPENSES AND OPTIONAL COVERAGES " section.

I think you are misreading your policy. The list of losses "we do not cover" appears to be from Section I - Property and not from Section II - Liability. Take another look. If you still think it says what you say, then make a digital copy of the policy booklet and upload the file here so we can take a look at it. Or give me the policy form number as I probably have a sample if it's a standard form. The form number is typically at the corner or every page.

PS: I commend you for reading your policy and trying to understand it. Most don't and get unpleasant surprises when they have a claim. Feel free to ask as many questions here as you want.

I spent the last 9 years of my career as a claim rep. I know my way around an insurance policy.

 

[Jaycee10]

Thanks AdjusterJack,

The form is:
HP6000 0205 (at the top right corner)
The verbiage appears in section L-2 (page 9 of 11)

It's definitely in the Liability, Medical Expenses, and Optional coverages section.
However, on second look, this is my landlord policy for my rental. I did not find similar verbiage in the home-owner policy for my primary residence. But the question remains the same though, as I will likely convert my primary residence to a rental in the future and would have this same policy for it then. I appreciate all your feedback!