Monteleone vs. The Auto Club Group, et al.' - AAA's Water Damage Lawsuit & What It Means To You

On July 2, 2015, U.S. District Court Judge George Steeh ruled in a class action, water damage lawsuit, Monteleone vs. The Auto Club Group, et al. that AAA Insurance improperly denied full coverage for policyholders' water damage claims. This water damage lawsuit left thousands of insureds without coverage and forced to pay for costly repairs and restorations out-of-pocket. Co-lead counsel Jason Thompson of Sommers Schwartz, P.C. summarizes the plaintiff's argument:

"Since 2009 and for many years after, AAA was outright denying water loss claims - overflows in flooded basements - without investigating the source of the water as required by the contract and law. We uncovered a deliberate plan designed by AAA, which in 2009 ordered AAA offices across the country to adopt a policy to deny such claims and force people to buy riders that limit AAA's exposure to amounts such as $5,000 to $25,000. In the case of the Monteleones, they lost over $100,000 and were told they were limited to the water loss rider."

This water damage lawsuit should serve as a reminder to all homeowners to know your policy! Know what type of water damage your policy covers, and whether or not you're covered for mold damage. After all, a good offense is always the best defense.

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Does your homeowners insurance policy cover flood damage?

According to the Insurance Information Institute (I.I.I.), standard homeowners and renters insurance does not cover flood damage. Flood coverage must be purchased as a separate policy, most notably offered by the National Flood Insurance Program, which provides coverage for up to $250,000 for the structure of the home and $100,000 for personal possessions. If you are concerned about flooding, be sure to ensure you have flood insurance in addition to homeowners insurance.

Does your homeowners insurance policy cover mold damage?

The Illinois Department of Insurance comprehensively explains whether or not homeowners insurance policies cover mold damage, and the answer is... it depends.

"It depends on what caused the mold and the policy coverage you have. Molds need water or moisture to grow, but not all causes of water damage are covered by homeowners insurance policies."

For example, standard homeowners policies typically won't cover water damage caused by maintenance problems like humidity or drainage issues, but will cover sudden and accidental water losses (think burst pipes and sump pump failures). It's also important to note that because homeowners policies exclude water damage caused by floods, mold borne of flood-related water damage is probably not covered by your policy.

If water damage or mold damage has happened to your home, call AdvantaClean at 877.800.2382 to set up a mitigation consultation. AdvantaClean offers emergency water flood damage services 24/7/365.

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