Gainesville, FL · Member since 2013 · 127 posts · 21 votes
A pipe broke in the wall of a rental house. The water went into the wall and into the carpeting in a bedroom. There doesn't seem to be any significant damage at this point, although mold could be a concern later on. Should I file a claim with the insurance company so that they can inspect the situation?
Hi Kay! I recently had a similar situation come up... I ended up opening a claim then had the insurance company close out the claim and covered the cost myself.
While working thru the claim process I ran into a handful of concerning events related to shady restoration companies and ended up being able to make the repairs for far cheaper than what the restoration companies were saying they would charge the insurance.
I did have the drywall removed and had blowers on the wet areas to assure it was 100% dried out and avoid mold issues.. along with had the area professionally cleaned after. You can have a company come out to do moisture readings and saving them for your records to have confirmation the area that was impacted is no longer a hazard. Also can be handy to share with your tenants to show you remediated the issue 100%.
From what I've heard, if you can avoid going the insurance route and the cost for repairs is less or slightly greater than your deductible its better to avoid filing the claim.
One thing to note, if you open a claim and close out even with a zero dollar payout the property still has a record of this damage.. something that can impact your resell, as an FYI.
Hi Kay! I recently had a similar situation come up... I ended up opening a claim then had the insurance company close out the claim and covered the cost myself.
While working thru the claim process I ran into a handful of concerning events related to shady restoration companies and ended up being able to make the repairs for far cheaper than what the restoration companies were saying they would charge the insurance.
I did have the drywall removed and had blowers on the wet areas to assure it was 100% dried out and avoid mold issues.. along with had the area professionally cleaned after. You can have a company come out to do moisture readings and saving them for your records to have confirmation the area that was impacted is no longer a hazard. Also can be handy to share with your tenants to show you remediated the issue 100%.
From what I've heard, if you can avoid going the insurance route and the cost for repairs is less or slightly greater than your deductible its better to avoid filing the claim.
One thing to note, if you open a claim and close out even with a zero dollar payout the property still has a record of this damage.. something that can impact your resell, as an FYI.
After having been through a few insurance claims in the last 10 years, I always lean toward not filing a claim. It is not just as simple as "are the repairs more than your deductible. The reasons are:
1. Just having one claim on your insurance record will cause your rates to increase on ALL your other insurance policies. The claim will not fall off your record for 7 years. I am paying higher rates on all my rental policies because when I was a newer investor I filed a claim on a $1400 repair so I would save the $400 above my $1000 deductible. That $400 savings has cost me thousands in the long run.
2. Any contractor, especially companies that specialize in insurance repair jobs, will charge more than double what you can get them to bid for just a regular cash job. And they will skillfully inflate the scope of work as far as possible to milk every possible dollar from your insurance company. It will also take much longer as they go through this process.
I save a ton of money now by having ACV insurance policies with high deductibles, and only file claims for major losses (over $10,000). You don't want to be filing small claims every other year.