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When Disaster Strikes and Homeowners’ Insurance Won’t Cover The Damage

Jake Neher/WDET

Barry Feldman

Homeowners in Metro Detroit have had to deal with some unexpected disasters in recent years.

Massive floods in 2014 did serious damage to homes, which forced FEMA to step in. And just a couple weeks ago on Christmas Eve, a huge sinkhole affected about 20 homes in Fraser, forcing families to leave.

But these are the types of disasters that aren’t usually covered by the kind of homeowners’ insurance most of us have. What happens to these families when their claims are rejected? What lessons can we learn from these events? And are there any public policy changes that could help in the future?

Policy holders really make two mistakes,” says Southfield-based attorney Barry Feldman, who specializes in insurance litigation. “They don’t read their policy — and they should, they have an obligation to do so and they have an obligation to ask questions if they don’t understand it. And the second thing that they do wrong is they put too much faith in their insurance agent.”

But Feldman says state policymakers should also step up to the plate to protect homeowners.

States like Florida and California, they have much tougher laws that protect the policyholder more than they do in Michigan,” he says. “Michigan’s got a huge and very strong insurance industry, and until the Legislature (and the courts)… do something more affirmative to interpret these policies as they’re written to protect the policyholder and not the insurer, it’s going to continue.”

Click on the audio player above to hear the full conversation.

Jake Neher/WDET

Gov. Rick Snyder and Warren Mayor Jim Fouts tour flood damage in Warren in 2014.

 

Image credit: Jake Neher/WDET

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