Russel Ray, San Diego home inspector, had a client in March 2010 who called him with an insurance problem related to his water heater.
It had been many years since he worked in the insurance industry, but he learned all their secrets. So he told his Clients at the home inspection that if they ever have a problem with their insurance company, such as a claim that is denied, to give him a call.
Home insurance is not the catch-all for everything that is wrong, or could go wrong, with anything in the home.
First Russel had to determine if the water heater was even covered since it was 13 years old. It was. (Many insurance companies use 10 years as the cutoff date for insuring major systems like water heaters.)
Then he had to determine just exactly what was covered, and that’s where you have to read the fine print. In this case, the actual water heater was covered. However, whenever you replace something like a water heater, the new one, including everything that is needed to actually make the water heater heat water, has to meet current codes. In this case, that meant that the gas line, the water line, the TPR drain line, and the exhaust vent would have to meet 2011 standards rather than 1998 standards.
The fine print in the insurance policy said that bringing anything up to current codes is not covered. Oops.
The plumber provided a list of expenses that would not be covered by the insurance company:
- $85 for disposal of the old water heater — No you can’t keep the old water heater unless you do the replacement yourself. California doesn’t want to find old water heaters thrown alongside the freeways or into our canyons so you can save $85.
- $50 for a drain pan
- $85 to modify the gas line
- $75 to modify the TPR line
- $85 to modify the water line
- $75 to modify the vent
Grand total: $455
Cost of water heater (covered by insurance company): $457
Russel is always a little wary of professionals who have contracts with insurance companies because of those secrets he learned many years ago. It doesn’t matter what kind of insurance you have (health, auto, home, etc.), insurance companies are in business to make a profit, so if they have to pay for something, they are going to find the least expensive parts and the cheapest labor.
Unfortunately, sometimes those people with insurance contracts will increase the price of whatever they DO get to charge the customer in order to make up for that bad insurance contract. The insurance contact is simply used to bring them business.
Russel called a couple of plumbers that he refers to ask them about the costs, and in this case, both plumbers explained everything to him and said that the costs were competitive.
He called his Client back, explained the costs to him, and told him to go ahead with the insurance company’s plumber.
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