Why Insurance Companies Deny Water Loss Claims—and How to Protect Yourself

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When water damage strikes, many homeowners assume their insurance policy will cover the loss. Unfortunately, that isn’t always the case. Insurance companies frequently deny water damage claims, often leaving families with unexpected repair bills and stressful disputes. Understanding why these denials happen can help you avoid pitfalls and strengthen your position if you ever need to file a claim.

Common Reasons Insurance Denies Water Damage Claims

1. “Long-Term” or “Gradual” Leaks
Most standard homeowners’ policies only cover sudden and accidental water damage. If an adjuster determines the loss was caused by a slow leak—such as a dripping pipe behind a wall over months or years—they may call it a “maintenance issue” and deny coverage.

2. Lack of Documentation
If you can’t prove when the damage happened or how it occurred, insurers may claim there’s not enough evidence to tie it to a covered event. Photos, videos, and professional inspection reports are critical in supporting your claim.

3. Excluded Sources of Water
Not all types of water damage are treated equally. For example, many policies exclude flood damage, water backing up through drains, or sewer/septic overflows unless you purchased separate coverage.

4. Mold Resulting from Water Damage
Even when water damage itself is covered, mold growth caused by that damage is often excluded—or capped at very low limits. This leaves homeowners responsible for expensive remediation. Insurance companies frequently argue that “mold takes a long time to grow,” labeling it as long-term damage. In reality, mold can begin germinating in as little as 24 to 48 hours after water intrusion, making this a common but misleading excuse for denial.

How to Protect Yourself Before and After a Loss

  • Know Your Policy: Take the time to read your coverage details, especially exclusions related to water damage, mold, sewer backups, and floods.
  • Act Quickly: The longer you wait to report or address water damage, the more likely your insurer will call it “long-term.” Contact a restoration professional immediately.
  • Document Everything: Photograph the damage from multiple angles, keep damaged materials, and request a professional inspection. Independent reports can make all the difference in disputes.
  • Request Clarification in Writing: If your claim is denied, ask for the specific policy language being used against you. This can give you leverage if you need to appeal.
  • Use Your Right to Choose a Contractor: Insurance companies may recommend preferred vendors, but you are legally allowed to hire the restoration company of your choice. Choosing a qualified, experienced team ensures the work is done right—not rushed to save the insurer money.

Final Thoughts

Water damage is stressful enough without fighting your insurance company. By understanding the most common reasons for claim denials and taking proactive steps to document and protect your property, you can strengthen your case and improve your chances of a successful payout.

If you’ve experienced water damage and want expert help not just with cleanup, but also with the documentation insurers demand, MSI is here to guide you through every step.

From Denied Claim to Full Coverage — Media, PA Water Loss

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What seemed like a small water damage issue on the first floor of a single-family home in Media, PA turned out to be a multi-floor problem that had been quietly causing damage for some time. This project revealed the hidden extent of water damage — and how having an experienced restoration company can make all the difference when dealing with insurance claims.

The First Call

When the homeowner first contacted us, they believed the water damage was limited to their first floor. Upon inspection, our team found additional damage extending upward to the second floor and downward into the finished basement. With no visible source in sight, we began carefully opening walls to trace the water’s path.

Finding the Culprit

The break was eventually traced to a cracked stack pipe in the second-floor wall. The homeowner had already filed an insurance claim, but it had been denied because the insurer labeled it a “long-term leak” — a common reason for claim rejections, especially when mold is involved.

However, our inspection told a different story.

Proving the Case

We documented how the crack in the pipe was small enough to release only minimal amounts of water at a time. The insulation and double-layered drywall/plaster acted like a sponge, absorbing the water before any signs appeared on the surface. By the time damage became visible, the underlying problem had been active for some time — but not because it was ignored.

Once the wall was opened, a plumber could repair the pipe, and with our findings, the insurance company reversed its decision and covered the claim.

Understanding Category 3 Water

This was a Category 3 water loss — the most hazardous classification:

  • Category 1: Clean water from a sanitary source.
  • Category 2: “Gray” water with some contamination.
  • Category 3: “Black” water containing sewage, bacteria, and dangerous pathogens.

Because the cracked stack pipe was part of the home’s waste system, any escaping water posed serious health risks. Immediate, professional remediation was essential to remove contaminated materials, sanitize the area, and prevent mold growth.

Why Stack Pipes Crack

Stack pipes — the vertical plumbing pipes that carry waste and water from upper floors — can crack for several reasons:

  • Material fatigue in older cast iron or PVC systems.
  • Shifting or settling of the building.
  • Temperature fluctuations causing expansion and contraction.
  • Corrosion or rust over time.

Even a small crack can cause major hidden damage, as this case clearly showed.

The MSI Difference

Our role went far beyond cleanup. We:

  • Discovered the hidden extent of the damage.
  • Removed contaminated materials from all affected floors.
  • Performed mold remediation to IICRC standards.
  • Coordinated with the plumber for quick repairs.
  • Provided the documentation needed to reverse a denied insurance claim.

When you’re facing water damage — especially from a hidden source — you need a restoration company that knows how to uncover the problem, clean it up properly, and help you get it covered.

Have water or mold damage you can’t figure out? Call MSI at 877-712-1600. We’ll find the source, stop the damage, and help restore your home safely.

Why You Can & Should Choose Your Own Restoration Company

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Dealing with water damage is stressful enough without the added complexity of navigating insurance claims. While many homeowners rely on their insurance companies to guide them through the process, it’s important to know that you have the right to choose your own restoration company. This decision can significantly impact the efficiency and quality of the repairs.

Homeowner Rights
When you file a claim for water damage, your insurance company may suggest or recommend a specific restoration vendor. However, as a homeowner, you are not obligated to use their preferred provider. You have the complete freedom to select a vendor based on your own research, preferences, and past experiences.

Pros and Cons of Choosing Your Own Vendor:

  • Personal Comfort: Opting for a company you trust or that comes highly recommended by friends and family can make a significant difference in your peace of mind during the restoration process.
  • Quality of Service: You can choose a company that you know has a good track record and provides high-quality service.

Cons of Not Using an Approved Vendor:

  • Pricing Discrepancies: Non-approved vendors may charge rates that are higher than what the insurance covers, potentially leaving you to pay the difference.
  • Claim Delays: Using a vendor unfamiliar with your insurance company’s process can lead to delays in claim approval and project completion.

Benefits of Using an Approved Vendor
Choosing an approved vendor who is versed in the insurance claims process offers distinct advantages:

  • Familiarity with Claims Process: Approved vendors understand the documentation and procedures that insurance companies require, which can streamline the claims process and hasten your home’s restoration.
  • Approved Vendor Price List: These vendors use a pricing list that is generally accepted by insurance companies, ensuring that there are no unexpected out-of-pocket costs for you.

Conclusion
Selecting the right restoration company is a crucial decision that affects not just the quality of repairs but also the ease of your insurance claim process. While you have the freedom to choose any vendor, an approved vendor like MSI offers the dual benefits of expertise in insurance procedures and a commitment to customer-first service. At MSI, we ensure that our interests are aligned with yours, not the insurance company’s. Trust us to prioritize your needs and help you navigate through this challenging time with ease and transparency.