Crack Houses! – What’s Up With My Property Insurance?

First of all, I am not an insurer, lawyer, insurance expert, home inspector, structural engineer, sinkhole expert or any other professional that might take exception to this blog post.  I am a professional painter contractor just trying to help my community understand what’s going on in today’s market. We all know there is a growing crisis of obtaining and maintaining insurance on our property in Florida.  My goal here is not to attack the industry but to educate a few property owners on how to potentially avoid stepping into this muck.

Due to excessive and frequent bogus claims for sinkhole damage, water intrusion, mold remediation and other hazards, insurance companies have been more aggressive and are conducting record numbers of onsite insurance inspections.   These inspections are occurring for both new and existing policy holders.

Insurance is risk management. Insurance companies are mostly for profit.  They are umbrella peddlers.  They lend you an umbrella for a rainy day. The premiums you pay are invested in other securities and they hope their returns exceed your claims.  There is a fiduciary role for both parties.  They agree to pay reasonable claims.  You are required to maintain your property’s condition at an acceptable level.  If not, then insurance companies can deny your claims.  Overall, the industry has done a poor job at defining your responsibilities for maintaining the property.  Policy language is legalize and nebulous.  Recent and growing trends for completing onsite inspections are creating a lot of additional stress.

Loopy Language

You have to love the language used in our world.  It seems we have to make up with terms that have different meanings depending on who interprets the term.  In the case of new polices, insurance companies like the term “denied.”  They issue a policy only to turn around and deny coverage for certain aspects after inspection (underwriting).  These inspections rarely, if ever, are completed before issuing the initial policy.  Agents, realtors and consumers involved in this process don’t seem to be very informed about what can happen. The most common denial is for sinkhole coverage.  Appears
that any visible cracks on the building will result in loss of this coverage.  The immediate reaction of the owner is panic and frustration.  But, there may be ongoing concerns as well.

For existing policy holders, the favorite term is “non-renewal.”  Seems the there are ramifications of cancelling a policy.  So the industry just does not renew.  Ok people, maybe I am not so smart, but isn’t the outcome is the same? Call it whatever you want, the property owner still has to find new insurance. A difficult, confusing and time consuming process.

If your property loses sinkhole or other coverage due to cracks, I would also expect denial of payment for any water intrusion or mold claims arising down the road.  The insurance company is likely to pull out the pictures from the inspection and show the cracks. I can almost hear it …. “Sorry, but evidence in our database shows you failed to maintain your property at an acceptable level.”  Policies seem to include the term “regular and routine maintenance.”  This is very open-ended and subject to broad interpretation.

Not sure what goes into the industry’s collective “Comprehensive Loss Underwriting Exchange (CLUE)” records database.  But seems to figure these non coverage, non renewal, otherwise cancelled properties and denied claims would show up here.  I would bet this makes finding new coverage and getting claims paid a bit more difficult.

What Are Crack Houses?

Virtually every stucco home in our area has some cracks.  Cracks are caused by the continuous heating and cooling of the masonry, water intrusion through failing paint, settling from living on the Florida sandbar, and sinkholes.  In my opinion, the vast majority of the cracks we see are caused by the first two items.  The issue here is failure to maintain the home is a regular and routine manner.
The risk to the insurer is pretty high.  Water intrusion causes mold and other damage to the dwelling.  Insurers don’t want to pay these claims or deal subsequent health issues which might come later down the road.

Settling cracks are fairly common.  (Funny, the sinkhole litigation attorney web sites all seem to say cracks are not common.)  What’s not common is sudden shifting and major new cracks in the building.  These may be indicative of structural problems or sinkholes.  Regardless, there have been tons of cases litigated in this area.  It’s messy and insurers are trying to avoid this arena.  Seems any cracks on your home will result in cancellation, non-renewal or denial for sinkhole coverage.  Even if you have coverage you will likely have to fight to get a claim paid.

PS – I see a lot of roadside billboards for sinkhole issues.  Some are for litigation attorneys and others are for companies which inspect and fix sinkholes.  You have to make a lot of money to afford these billboards (just saying….).

Insurance Inspections

Insurance inspectors are the eyes and ears of the insurer. They complete physical inspections of the property, diagram the dwelling, complete a checklist of hazards & conditions, and photograph the home along with any noted hazards or conditions.  Inspections are generally completed on the exterior of the home (no appointment necessary – the insurance company typically has the right to do these at any time).  In some cases, interior info is needed as well regarding the condition of electrical wiring, plumbing, heating, etc.  This may require an inspector to make direct contact with the homeowner.  My guess is we will see the interior inspections expanded as more insurance industry resources are pushed into this area.

The insurance inspector is not there to give you advice.  Their only role is to help the insurer define, manage and mitigate risk.  Better in most cases to just let them run the checklist and take some pictures.  Any discussions you have will likely involve questions you may not be able to answer.  Not trying to be shady here.  Just don’t give them additional reasons to give the insurer an issue.

Note: I have seen a few of the crack pictures taken on these inspections.  They are often close up shots making the crack look like the Grand Canyon.  The underwriter back in office has to rely on these for making a risk decision.

What Are Your Options?

I certainly don’t have all the answers or claim to have all the solutions.  Here are a few of our observations:

1. There is a high level of need for additional education and disclosure.  Let your local and state politicians know you are concerned about this emerging trend.
2. Real estate agents, home inspectors and insurance agents need to take a much more proactive role in this issue for property buyers.  They vast majority either don’t know this is occurring or leave it up the consumer.  Proactive is always better than reactive.
3. Some insurers will provide the property owner with time to address the cracks.  Others will not.  In some cases, once sinkhole coverage is denied, it cannot be reinstated.  Claims denial for water intrusion and mold issues are still emerging but we expect this to be a substantive issue for homes which had prior non-renewals or denied coverage.
4. Insurers need to better define regular and routine maintenance for the property. Responsibilities are far from clear. Most policies are mute on what this means.  Recent actions by the insurance industry are focused on claims avoidance only.  This is not acceptable and needs to change immediately.
5. Home and property owners have neglected maintenance of buildings due to economic concerns and declining values.  Protecting the property (the insured asset) is a requirement not a luxury.  Cracks must be fixed, masonry needs to be sealed and areas of potential water intrusion need to be addressed.  Patching just the cracks is not sufficient.  You must deal with the causes not just the results.
6. If you have structural or sinkhole concerns, then hire a professional engineer with credentials in this area.  Home and insurance inspectors are not typically certified in these areas of
   expertise.  They can only speculate on potential problems.   These issues are serious and require more than just a casual observation.
7. If your home or property insurance is coming up for renewal soon, get in front of this trend.  There is a pretty strong probability your home will be inspected.  Make sure your property can stand up to the inspection.  If not, get appropriate licensed contractors to complete the work prior to an inspection.
8. Just because you have insurance don’t assume you are fine.  Insurers can still deny claims.  Getting payment on your claim is not guaranteed.  It can take a lot of time, energy and even legal expenses.  If you have been avoiding maintenance due to financial concerns, this could be disastrous.
9. Patching, sealing, painting and protecting your asset does guarantee you will never have a water
   intrusion issue or other issues with your insurer.  No one can make that warranty.  However, insurance companies are more likely to be responsive to owners which maintain their property.
10. Expect changes in the way insurers evaluate individual properties as this inspection trend matures.  As the industry collects and analyzes more data, I would expect to see more defined underwriting criteria like those found in auto insurance and lending business.  Well maintained properties should be able to command lower premiums.

Insurance Denied, Not Renewed or Concerned About Upcoming Renewal?

If your insurance has been denied or not renewed, don’t panic. There are solutions but it is going to take some time to pull these together.  ProTect Painters of Oviedo ~ Winter Springs receives multiple calls each week from home owners or their advisors.  We have developed relationships with local insurance, construction, engineering and other professionals who can assist you. If you have a renewal within the next few months, now is the time to find out the condition of your home.  Proactive is always better than reactive.

In either case, just give us a call at 407-542-9036 and set up a time to come out and look at your home or business property.  Our evaluations are free.  We’ll meet with you to discuss the situation, examine issues we believe can be addressed by professional paint services and introduce you to other professional who can help take the stress out of the problem.

The Healthy “Painted” Home – Can Painting Really Help?

Bet you never expected to see a painter talking about creating a healthy home.  Well …. ProTect Painters is certainly not your typical painter.  We focus on quality and results.  The connection between paint and your health is far greater than we imagined.  We hope this article will encourage you to learn more and take precautions to help safeguard your family.

Indoor Air Pollution – Reduction or Elimination

The idea of the sick building syndrome is not new.  Most of the press is centered on public work spaces but the issue is no less problematic in a home.  In fact, our Florida climate may be one of the worst environments for creating a ripe breeding ground for sick elements.

Indoor air pollution is created by a long list of items including building materials, furniture, household chemicals, pets and virtually everything you bring into the home.  Under normal circumstances, these products give off the most contaminants when newly introduced.  That new carpet smell (like the new car smell) is one you may have experienced. Not all contaminants smell.  Many have no smell or are masked by other chemicals which produce more contaminants.  (i.e. A product labeled as unscented likely contains more chemicals than its scented partner.)  

Total elimination of indoor contaminants is not a viable option. In most cases, simply opening the doors or windows, letting in some fresh air, will help reduce the amount of contaminants in an indoor space.  Limiting or reducing the introduction of new contaminants is also a good way to reduce your exposure.

 VOCs – Why Worry?

 “Volatile organic compounds (VOCs) are emitted as gases from certain solids or liquids. VOCs include a variety of chemicals, some of which may have short- and long-term adverse health effects”  “All of these products can release organic compounds while you are using them, and, to some degree, when they are stored.”  

“Eye, nose, and throat irritation; headaches, loss of coordination, nausea; damage to liver, kidney, and central nervous system. Some organics can cause cancer in animals; some are suspected or known to cause cancer in humans. Key signs or symptoms associated with exposure to VOCs include conjunctival irritation, nose and throat discomfort, headache, allergic skin reaction, dyspnea, declines in serum cholinesterase levels, nausea, emesis, epistaxis, fatigue, dizziness.”

(Source: EPA web site; http://www.epa.gov/iaq/voc.html )

Low/No VOC Paints and Lead Containment

Low Voc Paints

Most materials continue to give off small amounts of VOCs for extended periods.  Reducing the VOC content of paint introduced into or applied to your home can help reduce the cumulative build up and off gassing of VOCs. Use low or no VOC paints on all interior projects and low or reduced VOC products on the exterior.

Caution: The term Low VOC is akin to the word natural.  The definition is not well regulated.  Check the US Green Building Council LEED standards (http://www.usgbc.org/DisplayPage.aspx?CMSPageID=222&gclid=CLCEuJ-dmagCFQwZ2godWgizBg) or those developed by the Florida Green Building Coalition ( http://floridagreenbuilding.org/) for the levels of VOC s which are acceptable.

Lead Dust

For homes built prior to 1978, you may also have another issue – lead paint!  Lead is a deadly substance.  Lead dust created by chipping or deteriorating paint is ingested and absorbed into our bodies.  Lead causes a wide range of health effects, from behavioral problems and learning disabilities, to seizures and death. Children six years old are particularly at risk.

It is extremely difficult to remove lead from a home.  However, when properly coated with appropriate paint, lead can be contained.  You will need the resources of an EPA Lead-Safe Painting Contractor to evaluate your home and complete the project.   For a list of certified firms in your area, visit http://cfpub.epa.gov/flpp/searchrrp_firm.htm.

The Exterior of Your Home May Be Killing You!

The sub-title here is a bit extreme but the message is true.  Water intrusion, heat, and lack of proper interior dehumidification are combination for disaster.  Thousands or Central Florida homeowners are at risk.  We see tons of homes with failing exterior paint, cracking stucco, worn out or missing caulk around windows, leaky roofs and obsolete A/C systems. How many homes are at risk?  We don’t know.  However, our guess is 70-80% of the homes have more than one of these issues.

Maintaining the exterior skin on your home is critical.  Water intrusion through the exterior causes interior components to give off higher levels of VOCs and provides a breeding ground for other organisms which feed and grow on these organic materials (our most common nemesis is mold).  Keeping a good airflow and maintaining interior humidity levels below 55% can help.  But, you have to fix the source of the water intrusion.

Your house is designed to breath.  Fresh air comes in, goes through conditioning and then evaporating moisture goes out through the walls.  The exterior walls must provide a block for rain (particularly our wind driven storms).  If not, the pores in your home effectively get clogged and you have a recipe for toxic stew.  

Water gets trapped inside the walls, gets absorbed into building materials like block, drywall, framing and even interior paint.  Add exterior heat applied by our hot sun and Voila!  Those dormant VOCs wake up, start off gassing in higher levels and the critters that feed on this stuff (like mold) expand at alarming rates and cause even more damage to you and your home.  Since the moisture is now trapped inside your home, the VOC’s off gas in your space.  (Keep in mind they don’t all smell.  You can have this issue without smelling anything.)  Note: If you do have the smelly stuff, adding air fresheners will make it worse.  You are likely just adding more VOCs to your home. (see the unscented comment earlier) More food for the VOC feeders! 

Lead paints tend to repel moisture (that’s one reason why we used the stuff back in the day).  This also means extended moisture behind lead paint will result in adhesion issues and peeling.  Peeling lead paint creates dangerous levels of dust.  Picture the amount of power in a Sweet & Low packet.  Now spread this out over your entire house.  Can’t really see it now?  This much lead dust is enough to cause severe health concerns. 

Steps You Need to Take

We can’t solve all your problems, but you can take steps to reduce ongoing exposure to VOCs and improve your health.  Here are a few suggestions:

1. If your home is at a critical level, consider hiring an indoor air pollution consultant.  Not a mold test company.  I can almost guarantee there is mold in your home.  Hire a firm that has the right certifications and test equipment.  They need to able to test for many contaminants, have green building certification credentials and be able to provide thermal imaging of your home.  Expect to pay at least $600 and up for these reviews.  These are house doctors not actors.
2. If you have an A/C or a leaky roof issue, get an estimate and get it fixed. We can paint your home and help some.  However, professional painting is only part of the solution.  These other relatively expensive items have to be addressed.  
3. Painting your home is a lot more complex than the color you see.  Hire a professional painting contractor to do the work.  DIY is ok, but the majority of homeowners don’t do the preparation and sealing work correctly.  Don’t create bigger issues trying to save a few dollars. 
4. Make sure the painting contractor you select has knowledge and expertise in these topics.  The vast majority do not have a clue.  Worse yet, they don’t care. This is not acceptable.  Anyone with a paint brush can call themselves a painter.   That does not make them a qualified professional.
5. If your home was built before 1978, hire only EPA Lead Safety Certified contractors regardless of the renovation project (i.e even the replacement of carpet in a home with lead paint is an issue.)
6. Use only certifiable low or no VOC paint products on your home.  These are high quality paints from manufacturers (like Sherwin & PPG) that provide detailed chemical analysis on their products. 
7. Never seal the outside of your home with high build elastomeric coatings.  The newer ones are a bit better than prior versions.  However, these products don’t breath well and trap more moisture inside your home.  Use only high quality latex coatings.

 Summary & Closing Comments

We are not doctors or health consultants.  We don’t have a magic pill to make this issue go away.  We do have a prescription for improvement.  You owe it to yourself and your family to maintain and improve the quality of life in your home. 

Maintaining the skin on your home, working to reduce the introduction of VOCs into the environment and avoiding the conditions that cause additional deterioration are controllable events.  It’s your choice. 

ProTect Painters of Oviedo ~ Winter Springs is not just your typical painter.  We can help you make informed decisions about the health of your home.  Give me a call at 407-542-6031. Ask my client service center to set aside a time to discuss your home’s condition.  We’re still on our quest to learn more about these issues, but promise to share what we know.

Home Owners Insurance Can be Cancelled Due to Cracks – Take Action Now!

It does not take a genius to determine property insurance risk management in Florida is in a state of relative crisis.  Insurers are still reeling from the damages in the 2004 storm season.  Some new providers have come into the area but like health insurance, the rules for insuring your property are far from clear.

On a recent exterior painting estimate, I discovered a new twist.  Insurance companies are becoming more diligent with conducting onsite reviews of both new and existing policy holders.  The obvious items checked are diving boards and slides on pools, sinkholes and trampolines in the yard.  Seems these will get you denied or eliminate your renewal for many insurers.

The next comment may shock you.  Insurers apparently can deny coverage for lack of coating/paint and most certainly for visible cracks.  The homeowner above had their policy cancelled and renewal was denied due to these issues.  Yes, their house is overdue for paint and they have some settling and stucco cracks.  Bad news?   Their house is far from the worst we have seen.

I would estimate that at least 70% of the homes in Central Florida are overdue for painting.  And … virtually all masonry/stucco body homes we see have visible cracks in the stucco.  Insurers are not willing to take the risk for water intrusion through the exterior of the home.  If they cite your home during an annual onsite review, some may give you the opportunity to correct the issue.  Others will just cancel your policy.  Failure to prep, patch and paint the exterior, once noted, will likely be considered negligence and any damage post inspection will not be covered.

Water finds a home!  Don’t let it be your home.  Water intrusion can cause obvious damage.  It’s expensive to replace drywall, flooring and even furniture.  Worst yet… prolonged exposure creates mold.  Mold remediation requires a specialist and they are very expensive.  Live in a pre-1978 home?  Add even more costs requiring an EPA Lead Certified Renovator to conduct the repairs.

Bottom line?  Properly prep, seal and paint your home.  DIY patches on the cracks may not help you at all.  Most homeowners do not complete the process correctly.  The insurance inspector may fail your work and drop you if the work is not completed correctly.  Spend a few thousand now or pay many thousands later.  Your choice? 

PS – I would bet good money on the mortgage companies looking at this issue soon.  They have to protect their risk as well.