Because of the often-varied language of builders’ insurance policies, and the recently enacted laws governing how you pursue a construction defect claim, it is important that you retain experienced counsel from the moment you believe you have a problem or potential claim.
Each step you take toward seeking a remedy – from selecting a forensic expert, to the manner in which you notify your builder, to the determination of whether you have a potential claim under your own insurance policy – requires prompt but careful consideration of all issues and potential consequences. And no two cases are the same, so you need and deserve experienced lawyers who will fully and quickly analyze your situation and will explore every possible avenue of recovery for you. Whether in Bellevue, greater Seattle, Washington, Oregon or California, we work closely with engineers and construction experts of all disciplines to determine sources and causes of defects as well as the best, most cost-effective means of repair.
If you think you may have claims stemming from water intrusion, defective construction, problems with EIFS such as Dryvit, or any other construction defect, call us or e-mail us to discuss your case. Let us give your case the comprehensive attention you deserve. Our pursuit of favorable results for our clients is always relentless, and in many instances we work on contingent fee, so that you will not pay any attorney fees unless and until we recover money for you.
Preserving the Evidence:
If you discover damage to the building, your first step is to preserve evidence of the loss. That means you should:
- Take steps to mitigate the damage.
- Photograph the conditions, carefully identifying the area of the building, the location of the damage, and preserving the evidence within the photos.
- Save any physical damage that has separated from the building.
- Assess the potential damage to tenants.
- Evaluate your legal and ethical obligation to inform tenants or customers.
Hiring an Expert:
Before the damage has been contaminated or lost, you should hire an expert to review the evidence, the photos, the physical samples and remaining damage. The expert can explore for areas of dangerous conditions, and assist in assessing the risks to both people and property. The expert can assist in preparing and then submitting a claim.
Submitting an Insurance Claim:
Insurers Prefer a One-Way Door. Assuming you have good photos and a good story to tell, do you submit an insurance claim? Are there any other factors you should consider?
The first thing to know is that insurers are not your friends. You are not “in good hands” when you are in their hands. Insurers are in business to take in your premiums, but pay out as little as possible. They want the cash flow to flow in one direction only, their own.
When you submit a claim directly, you start out with a huge disadvantage. You may be great at managing properties, you are no match for the sophistication of insurance adjusters and policy managers. Let’s say you submit a claim for water damage, such as shown in this picture.
Will your insurer cover this? If the insurer finds evidence of construction or design defect, your claim will almost certainly be rejected because such defects are excluded from coverage.
Well before you submit the claim, you should have a clear understanding of the nature of the damage, the cause, and the language of the insurance policy that might apply to the claim. Finally, you have to know how the courts have interpreted those clauses in the policy.
Potential Types of Covered Losses:
What is “collapse”? What is a “flood”? What is a “pollutant or discharge”? These are all words that courts have considered in property damage cases in the past few years. Even within a state, different courts have ruled differently on what those words mean. Your insurer will try to persuade you that “collapse” means the building must have fallen down. We might argue it means that a stud within the wall is no longer performing. In any case, you have to know what your policy says, and how that policy has been interpreted, BEFORE you submit your claim.
Mold and decay:
Is there mold in the building? If you have or suspect mold, you may need to notify the tenants immediately because some people may have allergies to molds.
What if you are forced to evacuate an area of the building? Do you have business interruption insurance? How do you quantify that? We would recommend hiring an expert in the type of tenancies you have, and try to put together a cash flow projection, showing your probable lost income during and after the repair period.
Commercial versus Residential Buildings:
- What if you have a medical building, with doctors, dentists and laboratories?
- If you have either a fire or a flood, what do you tell the tenants?
- Do you tell them to file their own claims?
- Do you notify your own insurer?
- If you don’t, you run the risk that your insurer will later deny coverage because you didn’t notify it immediately.
- On the other hand, if you file a claim, you may get a notice of cancellation, or increase of premiums.
There is no question that insurance companies – including homeowners insurers and those companies that insure developers and builders – have gotten much tougher in recent years. Policies provide far more exclusions than coverage. Adjusters test their customer’s resolve by dragging out and then denying claims, often without complete investigations of the loss at issue. And all of this costs your clients money and creates substantial stress and risk for them.
Statutes of Limitation:
You have six years on a written contract to file a lawsuit, but you may have only one year to file a claim against an insurer. Perhaps you should do both, but which one first? Who would handle the lawsuit? Who should submit the claim? Does it look better if you try to negotiate yourself? Contact us today to discuss construction defects and property loss claims in Bellevue, greater Seattle, Washington, Oregon or California.