Q. We moved into our new house and within a few weeks, the sewer backed up into the shower and leaked out of the shower pan all over the downstairs area (very stinky!). Everyone agrees this is considered a "Category 3" leak. Remediation company came and took out the tile, flooring, a lot of drywall and dried everything out. Insurance company has no problem paying them for everything they did (they seem to work together a lot). Insurance adjuster is saying that the tile and shower pan are part of the plumbing and are not covered, but is saying that they will pay for the cement board behind the tile in the shower. They are also only planning to pay an amount roughly equal to the cost of the remediation for reconstruction (which is roughly equal to the estimate from the remediation company....because they provide reconstruction services as well). It seems ludicrous that reconstruction would cost the same as remediation. To rip stuff out and dry it out is a lower level of skill and doesn't require any materials.....but the adjuster is saying we are lucky that he is covering what he is covering. The remediation company isn't even available to do the job. We have 3 bids from other quality contractors that actually have availability and they are double the price.

A. The question asked: Is this adjuster acting in good faith with the position being taken with this policyholder? The insured advised that "a sewer backed up through the shower drain and leaked out of the shower area all over the downstairs with a Category 3 water leak. This is likely BLACK WATER which requires very specific clean up methods due to health and safety hazards.

The adjuster brought out a remediation company and tore out building items and dried out the wet areas but is not paying for tile and shower pan that the remediation company tore out. In my opinion, if the shower pan and tile had to be torn out to clean up the mess from a sewer back-up of BLACK WATER, it should be fully covered. In addition, the put back items and cost should also be fully covered. From what I can gather from this policyholder, I believe the adjuster may be confused and misclassifying the loss because the shower pan or plumbing pipes did not fail. This loss was from a sewer back-up.

Here we have a “sewer back up” not a failed shower pan or broken pipe. As long as a sewer back up is not excluded in the policy the whole loss should be covered including the full remediation expense to put the insured back in the same position as they were before the loss happened, subject to any deductible that applies. The policyholder should also assert their right to use the contractor of their choice to properly repair the damage with quality building materials.

If the shower pan failed or a plumbing pipe broke the insurance industry typically will not pay for the actual cost to replace the item that caused the loss, i.e., the cost of the shower pan or to fix the pipe (typically a very minor cost for both), but they would pay for all damages that resulted from the damages caused by the item that broke.

In this case this policyholder should appeal to the adjuster’s claim manager. If that fails, the policyholder can write a letter to the President of the insurance company requesting a file review.

 If you have questions regarding any property insurance claim related issues please call 866.296.7798 or contact us to submit a question to one of our public adjuster insurance claim experts.