Undetected Leak Could Cost Couple $50K

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Undetected Leak Could Cost Couple $50K

by Edmond y, Staff Writer, NCTimes.com

http://www.imakenews.com/pureaircontrols/e_article000421105.cfm?

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OCEANSIDE ---- An Oceanside couple who bought their " dream house " on

a hilltop near College Boulevard and Highway 76 in 1991 has found

that life there is anything but dreamy after a leaky pipe caused

tens of thousands of dollars of damage that their homeowners

insurance company says is not covered by their policy.

Even with all the space in their 2,500-square-foot Marbella home,

and Lavella Halvorson don't have a lot of room to spread out.

Their days are spent cooking, eating, sitting and talking in an 80-

square-foot foyer walled off by stacked boxes filled with their

personal belongings.

The rest of the first floor is consumed ---- almost literally ----

by the aftermath of the leaky pipe.

The Halvorsons, who said they never saw any warning signs that the

leak was developing, say they are faced with having to refinance the

home to fund what could be more than $50,000 in repair work just

when they were about to have their mortgage paid off.

The Halvorsons aren't youngsters; they're both retirees. They own

another home in San Diego, where their disabled son lives rent-free.

And both houses, they say through clenched jaws, are insured by

State Farm.

According to the Halvorsons, when they called the company to report

the damage and find out what coverage they had, the answer was none.

Zip. Nada.

State Farm told them, they said, that they waited too long to report

the damage. A company spokesman told the North County Times that

slow, undiscovered leaks aren't covered.

" I can't speak to specifics, " State Farm spokesman Mike Rossman

said, " but I would say in general that insurance is meant to cover

things that are sudden and accidental. "

According to Rossman, a leak that develops slowly is considered a

maintenance issue and is not covered by insurance.

At 4 a.m. May 23, the Halvorsons said, Lavella went downstairs to

let the dog out into the back yard and was startled to step in a

puddle of water in the kitchen. After trying to mop up the water and

realizing that it was still flowing in from an undiscovered source,

the couple called in a plumber and placed a call, at 9 a.m. the same

day, to State Farm.

The first estimate to repair the damage was less than $2,300, and

State Farm claim representative Carol O'Connor told the Halvorsons

not to worry, they said ---- the costs would be covered except for a

$500 deductible.

The next day, however, after an adjuster visited the home and the

extent of damage was better known, O'Connor said the claim would be

denied after all.

The problem was that the leak involved a copper pipe carrying hot

water either under or through the concrete slab on which the home

was built. As the leak slowly spread, workmen discovered, mold

developed inside the kitchen walls. Mold doesn't develop overnight,

and they said the State Farm representative told them that meant

more than a day had passed between when the leak began and when they

reported it.

" We asked how we could appeal the denial, " Lavella said, " and she

told us there was no point, she had referred the matter to a

supervisor and her decision had been upheld, which was the same as

an appeal. "

O'Connor did not return a call from the North County Times inquiring

about the decision, which stunned the Halvorsons.

According to , there is a seepage or leakage exclusion, which

he thought applied to flooding.

" I don't live in a flood plain, " he said. " My house is 200 feet

above sea level. "

In a letter written by O'Connor, the insurance company asserted

that " the predominant cause of the pipe leak is wear, tear and

deterioration, which has resulted in a continuous or repeated

leakage or seepage of water from the hot water pipe.

" Your policy ... specifically excludes coverage for wear, tear,

deterioration, continuous or repeated seepage or leakage of water

from plumbing system, " the letter states.

The policy also specifically states that the limit of liability for

mold damage is $5,000, but State Farm also has denied a claim for

that, said, but the letter states that because the mold was a

result of an event that is not covered by the policy, the mold also

is not covered.

" I was shocked, " Lavella said. " I always thought that's what

insurance was for. We just sent that company a $3,000 premium

check. " The Halvorsons have insured their homes with State Farm for

47 years, and State Farm also is their automobile insurer.

The Halvorsons asked for an appeal form to be sent to them, and they

said none ever arrived.

" Any coverage for water damage is, at best, limited to very specific

scenarios, " said Norman , a spokesman for California

Insurance Commissioner Garamendi.

" For instance, water below the ground surface that seeps or leaks is

not covered; however, water damage caused by a storm that blows off

roof shingles would be covered, " said.

That's little comfort to the Halvorsons, whose kitchen was gutted to

get rid of the mold. Workmen in the home last week warned visitors

not to enter the work area without protective suits and masks.

The repairs can't be postponed, the Halvorsons said, and the costs

keep escalating. They had to pay $1,800 just for four days' use of

special dehumidifiers to dry the place out. Their expenditures

already have passed $35,000, they said, and there is no end in sight.

For technical reasons ---- theirs is a post-stressed concrete slab --

-- the offending copper pipe can't be dug out, so it had to be cut

off near the hot water heater and will have to be rerouted.

Meanwhile, though they sleep upstairs, their daytime life is in the

foyer, where a chair and a sofa face each other so closely that the

Halvorsons touch knees when they sit and talk. They have a microwave

oven sitting on a side table in the foyer.

" We have to use the laundry room to wash dishes, and we have to go

through the garage to get to the bathroom, " Lavella said.

, a meteorologist who worked for the National Weather Service

for 33 years and for the Air Pollution Control District for 10, said

he knows when he sees a storm coming. In his opinion, his wet floor

is something his neighbors should pay attention to.

The home was built by Silverwood, the original developer of

Marbella, but the company filed for bankruptcy in 1990. The

Halvorsons bought their home at auction in the wake of the

bankruptcy.

" One other resident in the development has had a slab leak that I

know of, " said. " It's costing him $18,000 to re-plumb his

house. "

But the Halvorsons think they may be just the first two cases of

such leaks to come to light in the community, and that all of the

homes in the development are susceptible to undiscovered slab leaks.

" It troubles me that so many homeowners don't know that this can

happen, " he said.

He doesn't know it yet, but he could have more homeowners insurance

trouble himself. Rossman, the State Farm spokesman, said his company

will report the incident as a claim for water damage, even though

the claim was denied, and that the claim will become part of the

industry's database of high-risk homes.

The Comprehensive Loss Underwriting Exchange, a database operated

since 1992 by ChoicePoint Inc., a technology company near Atlanta,

tracks both homes' and homeowners' claims experience; being listed

in the database can effectively get a house blacklisted or an

insurance policy canceled in some circumstances.

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