SAN DIEGO — CBS 8 has learned a class-action lawsuit is in the works against State Farm Insurance for denying water-leak damage claims.
Water damage claims are being denied at an alarming rate by State Farm, according to David Melzer, a public adjuster who advocates for homeowners. “In 2019 they came out with a policy that’s really ambiguous,” said Melzer.
State Farm's updated homeowner's policy language says "losses not insured" include "leakage of water... that occurs or develops over a period of time... and is continuous."
“Most other insurance policies actually specifically state a leak ongoing for 14 days or more is excluded. But State Farm’s policy has now just become any ongoing leak, whatever that is,” said Melzer, president of Property Claims Consultant in Carlsbad.
Chula Vista homeowner Mark Matthews said a State Farm adjuster denied his water damage claim, even though he had a plumber's report saying the pipe in the wall suddenly started leaking.
“He did his photos, his measurements, and his observations. Then he determined, nope, State Farm will not cover any of this because, according to him, this has been continuously going on,” said Matthews.
CBS 8 found an attorney in La Jolla who said he was in the early stages of class-action lawsuit against State Farm. The future legal action may hinge on that State Farm phrase: "over a period of time."
“It's a very vague phrase that's in their policy, and they're using that to just deny claims outright,” said the attorney, Erik Jenkins.
He said State Farm stopped writing new homeowner's policies in California about a year ago and that's when Jenkins saw a sudden increase in water damage claim denials.
“The adjusters seem to have a more cavalier attitude about denying the claims. These adjusters have a duty to act fairly in adjusting the claims but State Farm is saying we're not going to cover your claim. And if you don't like it, you can take us to court,” said Jenkins.
CBS 8 asked asked State Farm about recent changes to its homeowner's policies. The company responded with the following statement:
“Due to our customer privacy policy, we can't speak to the specifics of a claim. While we empathize with our customers when they experience a loss, it’s important to note that every claim is unique and not all losses are covered by insurance. Our commitment to paying what we owe has not changed.”
Attorney Jenkins said homeowners interested in being evaluated as a possible plaintiff in the class-action lawsuit against State Farm should email his law firm at ejenkins@jenkinslawfirmapc.com.
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