If my insurer declined coverage on my house damage, what is our recourse?
Question Details: We were gone for most of this past summer, 2 months. Therefore I installed a mini-drip irrigation system on my front porch in order to water my houseplants while we were away. I brought them all out onto the porch. The system was running for about 2 weeks before we left so I know that all was working well. After we left, we received a message from one of our neighbors that we had a water leak on the porch and water was running everywhere. Our neighbor is very handy, so he figured out that the source of the leak was a failed backflow prevention valve that I installed. He took it off and the system was then working fine. We have any idea how long this leak was going on. He looked around the house but all seemed OK and we didn't think about it until we returned from our vacation. My husband found that our finished basement was completely flooded - carpet completely saturated and moldy, furniture, toys and all contents just gross. He called a remediation company who after n initial assessment, stabilized the conditions. They took out all the moldy stuff and brought in dehumidifiers, dryers, etc. before filing a claim. This company also helped my husband figure out what the source of the water damage was - the failed backflow preventer. Now at the time of the incident, our area had very dry conditions until the last month of the summer. Unfortunately that month was extremely wet, due to storms with lots of people filing claims. Due to the overwhelming number of claims, an out of state adjusters were brought in. We had the misfortune of having one of them. They declined coverage saying that it was cause by groundwater. We hired a public adjuster to help us with this and filed an appeal but they still declined coverage, saying that no matter that it was a domestic water source. And that he water came through the walls, therefore the damage is not covered. At this point we don't know what to do. The damage was quite extensive and repair will be costly. Not to mention that we have not been able to use our basement. If we were to hire a lawyer, do we even have a case or is it a waste of more time and money?
Whether you have a case or not depends on whether, such as with your neigbbor's testimony and the testimony of the public adjuster (or some other such expert) you could convince a court that the damage was caused by some cause that is not excluded under the terms of your policy. It certainly will be an "uphill" battle for you--it is probably less than 50-50 you would win:
1) The only way to force them to pay if they refuse to do so voluntarily will be to sue the insurer for "breach of contract," or violating their contractual obligations (the policy is a contract). Because you will be the plaintiff, or one suing, the "burden of proof" will be on you: you will have to convince the court by a "preponderance of the evidence," or that it is more likely than not, that things happened the way you and your witnesses say. You must be more persuasive or credible than the insurer, since if everything is equal (let alone if they are more persuasive than you), they will win. The burden of proof gives them an edge.
2) They will of course have their own experts to testify how they believe the damaged occured and why it is not covered, and their own experienced defense attorneys.