Insurance Claim from Previous Owner

5 Replies

I bought a home 4-5 months back that in which I currently live. The home is fine, but I've found some water damage in the garage wall (where an ice dam backed up) and would like to replace the drywall and ensure there is no mold present. It is possible/feasible or unheard of to request that the previous owners file an insurance claim as the damage occurred before I moved in?

I wrote the previous owners a personal letter upon buying the home and they still live locally. Based on incoming mail, I've also learned that I'm a graduate of the same college as one of the previous owners. Do you think this would help me persuade them to work with me on an insurance claim? Obviously I'd be happy to do any/all of the paperwork as possible and to also pay any fees/deductibles associated with the claim. Is there a statue of limitations on this type of event?

I'm curious to hear what others say but if someone approached me with that request I'd dig my heels in as hard as I could. Unless the seller was intentionally hiding a material defect that he was aware of at the time I don't think you'll have much recourse as you likely had an opportunity to perform due diligence inspections prior to the sale. As far as I'm aware sellers have no obligation to warranty the condition of the home after a sale so long as they disclosed known defects.

On the upside, it doesn't sound like that extensive of a repair and likely one that wouldn't be worth filing an insurance claim for anyways.

Hi Skyler I’m an adjuster for an insurance company and handle homeowners claims. Every state is different as is every insurance company but being that you likely cannot 100% confirm that the loss occurred during the time the past owners policy was in effect you would be hard pressed to have such a claim covered. In addition from the fact a drywall repair is generally a minor repair, I don’t think it would be worth your time to go through tracking down the past owner and/or insurance company.

@Lamart Lockhart - What if it was possible (through pictures or inspections) to show that the issue was there before purchase? 

In terms of it not being a big repair, I would guess it may come to $2-k$3k. In that case if it took 20 hours of paperwork, I'd probably figure it was worth it. . . 

Thanks so much for the thoughts @Lamart Lockhart and @Ryan Murdock !

How were you able to have photos of this? Was it discovered/disclosed during your inspection? There’s likely a condition in their policy which requires the homeowner to notify the insurer of a loss immediately or within a reasonable time. If this was a known issue and the owner just let it sit depending on the company there may be grounds to deny the claim just on that basis.

The things I see...

1) If it was in the inspection report, and the agreement didn't call for the previous owner to repair it or file an insurance claim, and of course it wasn't repaired, why would the owner do so now? If it was in inspection report it should've been dealt with at the time.

2) Mold claims (first assuming there's evidence of mold) are excluded from coverage in many areas/policies. The previous owner may or may not have coverage.

3) Again this is policy specific, but many policies have a deductible of 1% of insured value. So if the property is worth $300k, that's a $3k deductible, right around what you said the repair may cost.

4) If it's something that should have been noted in the inspection (you mentioned there's pictures) as a defect, then the home inspector's policy may kick in.

Is it worth asking the previous owner? Well you can try, who knows. If I were the previous owner (AND it was still within time to file a claim), I would say no because A: it should've been something you brought up before, and B: even if you pay the deductible, the claim still remains on the CLUE report for up to 7 years, increasing their premiums for the new property.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here