CHAPTER 3 — Claim Types, Risks, Mistakes & Real-World Scenarios

3.0 Introduction: Why Understanding Claim Types Matters

Property insurance claims fall into distinct categories based on cause of loss, policy language, documentation requirements, and risk factors. The outcome of a claim is heavily influenced by:

• The type of damage
• The timing of discovery
• The method of reporting
• The clarity of documentation
• Policy exclusions or endorsements
• The insured’s compliance with duties after loss
• Statements made during the claim
• The carrier’s interpretation of cause

This chapter establishes a comprehensive, high-authority overview of all major property claim categories, the structural risks associated with each, typical mistakes made by policyholders, and real-world scenario modeling that demonstrates how claims unfold.

3.1 Water Damage Claims

Water damage is the most common type of property insurance claim.
It is also one of the most frequently limited, disputed, or denied categories due to policy exclusions and the difficulty of proving the timing and cause of the loss.

3.1.1 Covered Water Losses Typically Include:

• Sudden and accidental discharge of water
• Burst pipes
• Sudden plumbing failures
• Freshwater appliance failures
• Sudden shower pan breaches
• Sudden supply line failures
• Overflow from AC condensate systems
• Water discharged from fire sprinkler systems

3.1.2 Common Restrictions / Exclusions:

• Long-term leaks (seepage more than 14 days, 30 days, or continuous leakage)
• Water intrusion through deteriorated roofs
• Mold damage (unless specifically endorsed)
• Water backup or sewer backup (unless endorsed)
• Groundwater, surface water, or flood
• Wear and tear or deterioration
• Faulty workmanship and defective materials

3.1.3 High-Risk Scenarios:

• Slow leaks under sinks
• AC closet leaks with gradual damage
• Water stains that pre-date the claim
• Leaks caused by missing grout/caulking
• Repeated appliance drips
• Leaks discovered during renovations

3.1.4 Why Water Claims Are Frequently Disputed:

Because the insured must prove:

• The leak was sudden
• The damage occurred within policy terms
• It wasn’t long-term or repeated
• It wasn’t maintenance-related
• It wasn’t caused by negligence

Insurers often investigate:

• Moisture patterns
• Material deterioration
• Mold growth
• Prior repairs
• Plumbing age

3.1.5 Documentation Required:

• Photos from before and after the loss
• Moisture readings
• Plumber reports
• Mitigation invoices
• Dry-out logs
• Receipts for emergency repairs

3.2 Roof Damage Claims

Roof claims are highly sensitive because roof age, condition, and maintenance heavily influence coverage.

3.2.1 Covered Roof Claims Typically Include:

• Wind-driven damage
• Torn shingles or tiles
• Impact from wind-borne debris
• Damage caused by sudden storm events
• Hurricane or tropical storm damage (subject to deductibles)

3.2.2 Common Restrictions:

• Age-based exclusions (e.g., roofs older than 15 years)
• Cosmetic damage exclusions
• ACV-only roof endorsements
• Underlayment deterioration
• Improper installation exclusions

3.2.3 Dispute Triggers:

• Carrier asserts wear and tear
• Carrier attributes damage to deterioration
• Carrier classifies the damage as cosmetic
• Carrier argues no wind-created opening
• Carrier claims pre-existing conditions

3.2.4 High-Risk Patterns:

• Old roofs
• Tile roofs in hurricane states
• No prior maintenance documentation
• UV-damage misinterpreted as storm damage

3.3 Hurricane, Windstorm & Catastrophe Claims

Hurricane and catastrophe events generate large claim volumes, causing carriers to apply strict interpretations.

3.3.1 Policy Factors:

• Hurricane deductibles
• Windstorm deductibles
• Anti-concurrent causation clauses
• Ordinance & Law coverage
• Matching limitations
• Roof-specific endorsements

3.3.2 Challenges:

• Widespread carrier delays
• Large-volume adjuster turnover
• Inconsistent inspections
• Denials based on technical interpretations
• Supplemental disputes

3.4 Fire Claims

Fire losses are typically covered but involve extensive documentation.

3.4.1 Categories of Fire Loss:

• Electrical fires
• Kitchen fires
• Appliance fires
• Lightning-related fires
• Structure fires
• Wildfire-related damage

3.4.2 Documentation Needs:

• Fire report
• Cause and origin evaluation
• Inventory of destroyed personal property
• Cleaning estimates
• Smoke damage testing

3.4.3 Common Disputes:

• Determining origin and cause
• Verifying personal property inventories
• Smoke vs. soot vs. heat damage classifications

3.5 Mold Claims

Mold is often limited or excluded.

3.5.1 Mold Is Usually Covered Only When:

• It is caused by a covered water loss
• It occurs as a result of sudden damage
• It falls within the policy’s sub-limit

3.5.2 Not Covered When:

• It results from ongoing humidity
• Seepage or long-term leaks
• Poor ventilation
• Inadequate maintenance

3.6 Theft & Vandalism Claims

Thorough documentation is critical.

3.6.1 Requirements:

• Police report
• Receipts for stolen items
• Inventory lists
• Photos pre-loss

3.6.2 High-Risk Issues:

• Missing receipts
• Claims of high-value jewelry or electronics
• Unverified ownership

3.7 Liability Claims

Property-related liability includes:

• Slip and fall
• Dog bites
• Accidental injuries
• Property hazards

These claims follow a different legal standard and require evidence of negligence.

3.8 Commercial Claims

Commercial claims involve:

• Business interruption
• Loss of income
• Equipment breakdown
• Tenant-caused damage
• Building code compliance
• Commercial lease obligations

They require detailed:

• Financial documentation
• Tenant correspondence
• Maintenance logs

3.9 Common Mistakes Made by Policyholders

This is one of the most important encyclopedia sections.
Mistakes include:

3.9.1 Delayed Reporting

Leads to disputes over timing.

3.9.2 Inadequate Documentation

Most homeowners lack pre-loss photos.

3.9.3 Improper Statements

Miscommunication leads to misinterpretation.

3.9.4 Starting Repairs Too Early

Removes crucial evidence.

3.9.5 Filing Wrong Claims

Claims below deductible
→ triggers underwriting consequences with no payment.

3.9.6 Misunderstanding Deductibles

Wind/hurricane deductibles shock many policyholders.

3.9.7 Calling Insurance Before Getting Guidance

Top cause of denials.

3.9.8 Not Complying With Duties After Loss

Failure to mitigate or provide documents.

3.10 High-Risk Claim Categories

Some claims are inherently high-risk:

• Roof claims
• Mold claims
• Long-term leak claims
• Older home claims
• Hurricane follow-up claims
• Non-renewal-period claims
• Claims after prior losses
• Claims involving tenant disputes

These carry elevated risk of:

• Denial
• Underpayment
• Request for EUO
• Policy cancellation
• Non-renewal

3.11 Real-World Scenario Models

Scenario A — Sudden Pipe Burst

Sudden bathroom supply line burst → covered.
Correct documentation is critical.

Scenario B — Gradual Leak Misinterpreted

Shower wall leak over months → often excluded.

Scenario C — Roof Wind Damage

Wind uplift vs. deterioration → complex distinction.

Scenario D — Post-Hurricane Claim

Misclassification of cause → major disputes.

Scenario E — AC Overflow

Sudden overflow → often covered.

Scenario F — Appliance Leak

Dishwasher or washing machine failure.

Scenario G — Fire & Smoke Loss

Requires multiple specialists.

3.12 Why Adjuster Advantage™ Is Critical

This chapter establishes why Adjuster Advantage™ is essential:

✔ Water, roof, and storm claims are complex
✔ Documentation determines outcomes
✔ Homeowners misunderstand timing
✔ Deductibles cause filing mistakes
✔ Policy language is difficult to interpret
✔ Carriers scrutinize long-term damage
✔ Claims require evidence homeowners rarely have
✔ Pre-claim guidance prevents irreversible errors

Adjuster Advantage™ provides the system, structure, and guidance that protects property owners from the most common sources of financial loss.