My Insurance Won’t Cover Catastrophic Damages to My San Diego County Home and I Need to Sell Fast

I saw in the news recently that a couple of El Cajon homes have been charred by yet another fire breaking out in San Diego County. My first thought was: I sure hope no one was hurt. My second thought was: I sure hope their insurance claim goes through. It’s one thing to be stiffed out of a claim for a fender bender of because you dropped your brand new iPhone 7 while jogging around Balboa Park, but it’s another thing entirely when it leaves you choosing between paying for repairs and paying your mortgage.

It happens more often than you think, especially after an unexpected disaster like this one. It reminds me of a client of ours who was left facing this very situation when her insurer wouldn’t pay out after the Witch Creek-Guejito fires of 2007 caused tens of thousands of dollars in damage to her Rancho Bernardo home. Such extensive damage meant that the traditional housing market didn’t look favorably on her home. Facing sky-high repair costs and a mortgage to pay on a home she could barely live in, she was left with few places to turn.

What Will Insurance Companies Refuse to Cover?

When you take out a home insurance policy, some insurers can hide exclusions deep within the contract or use complicated legal jargon that’s difficult to understand. As a result, many people just don’t know they’re not covered for certain types of damage until it’s too late. In fact, you’d be shocked at the number of things insurers won’t cover in a standard policy, including:

  • Flood damage isn’t covered by the majority of standard insurance plans, which is unfortunate for homes in San Diego’s coastal flooding zone. If you’re located in a floodplain, you’ll need to consider specific flood insurance.
  • Mold damage is typically limited by most standard home insurance policies or entirely restricted. This is bad news for beachfront homes in areas such as La Jolla and Mission Bay which tend to suffer more from this type of damage. Mold doesn’t just look bad, it is also a health risk, and if you don’t fix the problem fast, it can quickly grow into an expensive nightmare.
  • Sewer backup can result from storms overwhelming pipelines that handle both stormwater and raw sewage, or from tree roots blocking pipes. Either way, they can cause untold damage to your property’s walls, floors, and furniture. Standard home insurance doesn’t cover damage from sewer backups, but additional premiums can be bought for as little as $40 a year.
  • Sinkhole damage can seem like something from a horror movie. But they can happen at any time, especially in areas that experience high levels of seismic activity or flooding. Unfortunately, Florida is the only state where insurers are required to provide coverage for sinkhole damage.
  • Termite infestations can destroy support beams and other wooden features in your home causing catastrophic damage. Even colonies as small as a few hundred can make your home dangerous to live in over time. But don’t expect your insurer to bail you out—most won’t.
  • Fires, however minor, can cause considerable damage to your home and property. Now, unlike most of the other forms of damage listed here, standard insurance should actually cover damage caused by fires. But here’s where the insurers may use a loophole to get out of paying, as in the case of our client: While they cover damage caused by the flames, they may not cover damage caused by smoke or damage from water used by the fire department trying to douse the fire. It’s also likely they’ll refuse to cover vacant homes—so beware if a fire forces you out of your home for more than thirty days.

Any one of these events could leave you with thousands of dollars of damage on your hands and feeling helpless, especially if you find out that something you assumed would be covered by your insurance won’t be.

Fixing the Issue Without your Insurer’s Help

Unfortunately, most people find about these restrictions the hard way when it’s already too late to do anything about it. So how can you best go out fixing these kinds of catastrophic damage and what is it likely to cost?

  • If flood damage is relatively minor, you may be able to use fans, dehumidifiers, and wet-vacs to dry out your home. Follow this Red Cross guide for a detailed step-by-step direction. In cases of more extensive damage, like that of our client, you could be facing a bill of over $20,000 to call in an expert.
  • Mold damage can be cleaned up yourself if it’s less than 10 square feet. If not then you’ll need to call in an expert. Mold remediation can take up to a week to complete and cost in the range of $3000-$6000.
  • Repairing damage caused by a sewer backup can run up a bill close to a staggering $30,000. Not only will you have to repair damage to your home, but it’s also your responsibility to maintain the sewer line. That means that if it burst, you have to replace it.
  • If you catch sinkhole damage early, you may be able to save yourself a fortune by implementing compaction grounding. This is the process of injecting a grouting compound into holes that have been drilled beneath your property. If it’s too late, then a repair can cost upwards of $100,000. In worst case scenarios, you could even lose your home.
  • Repairing damage caused by termite infestation is a twofold process. Firstly, you’ll need to call in an exterminator to get rid of the colony and any eggs left behind. Then, you need to repair any structural damage caused by the termites. The cost of this dependent on the extent of the damage but expect to pay anywhere between $1000-$5000.
  • Repairing fire damage can be an enormous task that requires contracting more than one professional. Firstly, you’ll need to dry everything if water was used to stop the fire. Ash and soot will then need to be removed before you can even attempt to clean your home. You’ll also need to assess if there was any structural damage and make immediate repairs if so. Only then can you begin to clean walls, furniture and carpets, using thermal fogging to deodorize against smoke odor. Depending on the scope of work, costs can run into high five or low six figures.

Repairs to damage caused by natural disasters don’t come cheap. They are also far from straightforward. Ultimately, there comes a point when homeowners will need to weigh up their options and decide if paying for the repairs are really worth it, or if they’d be better trying to sell the place.

Sell Direct to Relieve Worries

Unfortunately, selling on the traditional real estate market with a damaged home isn’t easy. Our Rancho Bernardo client talked to a number of realtors after the fire, but none were willing to take on the task of selling her half-ruined home. That’s when she called us. We helped her to sidestep the cost and hassle of repairs, as well as the housing market, by buying her home directly for cash.

We’ve helped thousands of homeowners out of similarly challenging situations. If you’re facing the same issues with your insurer and want to liquidate your home quickly and for a fair price, we’ll make a cash offer on your property within 24 hours of you giving us a call or submitting an online form. We don’t use pushy sales tactics, and there are no hidden fees to pay upon completion. If you do choose to accept our offer, we’ll close on a day that suits you. We’ve got you covered, even if your insurer doesn’t.