Who’s Insurance Covers Burst Pipes?

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I just shared a story about a friend who’s pipes burst and another post shows how to protect pipes in cold weather. This friend lives in another state but recognizes that I have a broad base of knowledge about construction, homes, common problems and he hoped I could help him with some insight into the tangled web of insurance claims.

You see the furnace was only 3 months old so anyone would assume it was under warranty. The company who installed the furnace had to make several trips to the home to identify the problem(s), ordered parts and ultimately installed everything at no cost to my friend.

Unfortunately there are still significant costs related to the plumbing repairs (burst pipes) along with the damage caused by the water (flooring, walls, furniture, etc). His home owners insurance is covering everything but now he is left with a deductible that comes out of his pocket?

That’s when I got the phone call. My friend (and many of My Handyman’s customers) call to seek advice on how to handle problems and sometimes this involves insurance claims as very few home owners have experience so the first time they file a claim they’re at a loss as to what to do.

Owning My Handyman has taught me quite a few lessons about negotiating with insurance adjusters (another post some day). This situation was different for me as all of our work is done by employees, so I’ve never dealt with a problem related to a subcontractor before. That’s not the end of the story as every good business owner has a network. I called a builder in my network to get advice and here’s what they recommended:

Which Insurance Company Pays?

• An insurance adjuster needs to review the problem and make a determination as to where the problem occurred.
• A faulty furnace would be the responsibility of the manufacturer, although an installer who sells you the unt is making a profit on the furnace and should include some type of warranty just like we do at My Handyman when we supply the materials. You see the heating company has a lot more experience, and presumably clout with the manufacturer than an individual home owner, and they should be able to recover their costs for replacement parts and potentially labor to correct the problem.
• An installation problem would be the responsibility of the installer, and their insurance (what is known as general liability coverage) would be responsible for covering the added costs of repairs they cannot perform like plumbing, repairs to home’s structure (floors, walls, etc) and furniture.
• The home owner’s insurance can provide temporary coverage, and presumably they might need to pursue liability on behalf of the home owner. This is important as the home owner should not be penalized for an accident outside their control (they didn’t buy or install the new furnace). We’re all too familiar with car insurance rates being raised after we get into an accident, and we don’t want to see a similar situation here.