What can my parents do if they bought a house that got flooded in the midst of heavy rainfall 4 months later and insurance won’t cover the damages?

My parents bought a house about 5 months ago that had some problems weeks later that were quickly fixed. Then about 2 weeks ago, a room got heavily flooded and another room became damp from the water that is leaking from under the floor near a wall during heavy rainfall. Some people came and drained the water the same night and a day later brought equipment to dry the carpets. The carpet was ripped and the beds and furniture were disassembled to accommodate the equipment. Then 5 days later, my dad was informed that his insurance didn’t cover the damages and renovation that is obviously needed and nothing will be put back together. What can my parents do in this situation?

Asked on December 17, 2018 under Real Estate Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 1 year ago | Contributor

1) They should look at their insurance policy and see if they think it should cover this--they don't have to simply take the insurer's word for it. The insurance policy is a contract; the insurer must pay when the policy says they must. If they believe that under the terms of the policy as applied to the facts of this situation, the insurer must pay, they could sue the insurer for "breach of contract"--for violating its contractual obligations.
2) If there is evidence that the flooding is a recurring issue that the seller must have known about, but failed to disclose, the seller may have committed fraud (sellers are obligated to disclose known significant issues with the property): fraud would provide a basis to sue the seller, such as for the repair, etc. costs.


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