If you haven’t already read Part 1 of this mini-series, please do so before reading this post; what follows will make more sense.
But first, a rant on home owner’s insurance policies. For your sake, I hope you never need your home owner’s insurance. You know all those warm fuzzy ads on TV with clever bylines like: “You’re in good hands” or “We know a thing or two because we’ve seen a thing or two.” Yeah, well good luck with that, because if your foundation is crumbling and your house is starting to collapse, those good hands won’t be writing you any claims checks. But the companies do come up with clever sales slogans and with creative reasons for denying claims. And that’s what this post is about.
Discovering the Damage, My First Claim, and Rejection
As you recall from Part 1, on an otherwise normal trip to the basement of my Ellington, Connecticut home in 2005, I discovered the concrete walls were literally disintegrating; this may sound like an exaggeration, but it’s not. Fortunately, working with a bunch of talented engineers at OTO got me going in the right direction. My co-worker Mike Talbot, PE made an emergency house-call to my basement the next day. His prognosis was not good. “I’ve never seen anything like this before. You better get Rob Johnson, a structural engineer and friend of mine to look at this”.
When Rob saw the basement he was uncertain about the precise cause of the problem, but not about what needed to be done: “You need to immediately install bracing to prevent an imminent collapse of the house and you better start planning for the replacement of the entire foundation … soon. Because whatever the cause, this concrete is toast”. Getting quick, knowledgeable advice from solid engineers was both depressing and extremely helpful. At least we didn’t waste time and money with useless attempts at a fix.
As reality sunk in, and I got a sense of just how disruptive and expensive the replacement project was going to be, I called my insurance agent to make a claim. I sent him photographs of the crumbling concrete, a copy of the Rob’s report, and told him he could visit any time. He said he would forward the information to the insurance company and they would contact me.
The insurance company assigned an adjuster and retained a consulting engineer to review the information and visit the property. A couple of weeks later I received the first of what would be three rejection letters. The letter stated that the failure of the concrete foundation was due to the pressure of groundwater and/or the action of frost against the foundation. The letter explained that my policy contained an exclusion for damage caused by water, and as much as they would sincerely like to help, they had to deny any liability for my loss.
Picture this – there were eighth to half-inch wide cracks that went clear through the foundation walls to the soil on the other side. Lots of them. Yet not a drop of water had ever come through those cracks. The insurer’s engineer had seen these cracks. How could groundwater with sufficient pressure to crack 12 inch thick hardened concrete walls not also cause water to come gushing through those cracks? Seemed like a good question to me. Although not one that interested the insurance company.
Since I’m a curious kind of guy I wanted to know the answer (this was before we had the results of the petrographic analysis). The only way to find out was to do a little groundwater study, so I had monitoring wells installed around the house. This turned out to be the first of several pricey out-of-pocket research projects to satisfy my curiosity. Mrs. Okun was not wholly enthusiastic about the cost of these projects.
Once the monitoring wells had been installed and water levels were measured, it became apparent that the water table was too deep for groundwater to be pressuring the foundation; the insurer’s engineer readily agreed. At that point I was still naïve enough to believe that the insurance company would welcome this new information and my claim check would be forthcoming. Hah!!!
Second Claim, and Rejection
So while the insurance company was developing their first rejection letter, we asked our engineer to move ahead with collecting concrete core samples and conducting the petrographic analysis needed to identify the cause of the failure. This was another pricey item, but my curiosity was demanding an answer. It took a little while to get the results, but they were definitive: the presence of the mineral pyrrhotite in the concrete’s coarse aggregate had caused the concrete to fail. Part 1 of this mini-series discusses the hazard pyrrhotite poses to concrete in more detail.
I forwarded the petrographic results and the groundwater level measurements to the insurance company and asked them to reconsider my claim. Their first engineer was not well versed in concrete chemistry, so the insurer retained a concrete specialist to review the petrographic report. This second engineer concluded that the problem with our foundation was due to sulfate in the groundwater around the house. In case you are curious, the new engineer did no testing of the groundwater to confirm this hypothesis. It’s a small world of engineers who know concrete chemistry and I had considered hiring this same engineer to do my petrographic analysis; I’m glad I didn’t.
Well, the insurer once again rejected our claim for a bunch of legalistic reasons and because in their opinion the collapse – which to them was not legally a real collapse – was caused by sulfate in the groundwater around our house.
Third and Final Claim Rejection
Fortunately, sampling the monitoring wells that were already installed to test for sulfate was easy and cheap. So I wasted no time getting this done. No surprises here, groundwater sulfate concentrations around my house were exactly the same as the published background levels for sulfate in north central Connecticut where the house is located.
As you would expect, I sent the information on groundwater sulfate concentrations to my insurer with a bunch of legal arguments and asked them to again reconsider our claim. I broke the claim into seven parts to make it easier for the adjuster to understand, not that this mattered.
Over time the pyrrhotite induced deterioration of the concrete caused the basement walls to expand, which pushed the outer walls of the house upward. This irregular upward movement causes windows and doors to get stuck in their casings so they will not easily open or close. This damage symptom was one of the parts of the claim I made. Here’s the insurer’s response to that part of the claim, verbatim:
The Insurance Company’s Engineer Mr. Smith, PE, has determined that only a portion of the damage to the upper floors resulted from the movement of the foundation. There has not been any structural impairment of the upper floors and therefore, these portion of the upper floors have not collapsed as that term is defined in Beach v. Middlesex Mutual Assurance Company. Therefore, for the reasons stated above, any portions of the upper floors which have sustained a loss, which loss was not caused by any movement of the foundation is not covered by the additional coverage for “collapse”. Furthermore, the collapse coverage specifically provides that “collapse does not include settling, cracking, shrinking, bulging or expansion.” Also, there is no coverage for this loss because exclusion 2.h.(6) quoted above excludes a loss “caused by: … settling, shrinking, bulging or expansion, including resultant cracking of pavements, patios, foundations, walls, floors, roofs or ceilings.” However, those portions of the upper floors which may have sustained damage because of the collapse to the foundation may be covered as “direct physical loss to covered property involving a collapse of a building or part of a building (the foundation) caused only by one or more of the following…defective materials…” Therefore, the Insurance Company will cover the repairs to the openings, windows, doors or walls of the upper which are related to the movement of the foundation.
After I read that last sentence, I reread it about ten times. I thought, “Well I’ll be!” They have finally agreed to cover something, because to fix the damage to the upper floors, it would first be necessary to fix the foundation! Yes! All this effort is finally going to pay off!
When I called the insurance adjuster in the morning to coordinate the next step, he explained that I had misunderstood their letter. That last sentence in the paragraph where it sounded like they were going to cover some of the damage, I got that wrong. That language was their way of letting me know they weren’t going to cover anything, because as I had surmised, the only way to fix the upper floors was to fix the foundation, and they weren’t going to cover that at all.
Last three thoughts for this post:
- In addition to the claim for damage to the upper floors, part of my final claim was for the reimbursement of engineering and testing costs, here’s their response to that: “The policy terms relating to loss payment do not provide coverage for engineering and testing fees to determine the basis for the loss and there are no engineering or testing fees required to determine the nature and extent of the repairs to any upper portions of the structure for which there may be coverage”. That was galling after all the fake technical arguments they had thrown at me.
- Ultimately with the help of a good attorney we entered mediation with the insurer and received a settlement for some of our costs, for which we remain grateful.
- Having a solid technical background was immensely helpful as was having access to the talented engineers at OTO and in the broader out-of-OTO network.
Stay tuned for Part 3, what it’s like to have your home’s foundation replaced.