bought a home 4 yrs ago found out 2 yrs ago septic system is illegal which makes home illegal and is now valued as a shed/barn Home valued 300,000 now valued 38,000 Is previous homeowners or my ins responsible to replace septic with legal septic?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jun 11, 2018

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Insurance Question from Farr West, UT

Asked on 06/11/2018

bought a home 4 yrs ago found out 2 yrs ago septic system is illegal which makes home illegal and is now valued as a shed/barn Home valued 300,000 now valued 38,000 Is previous homeowners or my ins responsible to replace septic with legal septic? The value of home needs to go back up to what the market value would be if the septic system was legal.

Answer given on June 20, 2018

Actually, neither insurance company is responsible for replacing the septic system in your home.  Homeowners insurance pays for direct physical loss to your home such as a fire, vandalism, windstorm. There is no actual damage to your home. It is simply a reduced value due to the illegal septic system.

You could try to go back and sue the previous homeowner but would have to prove that they knew the system was illegal.  You should talk to an attorney about the likelihood of this kind of lawsuit. Otherwise you simply have to pay for the installation of a new septic system.  The homeowner insurance company could cancel the insurance since the home is not properly constructed so it is in your best interests to repair or replace the system as soon as possible.


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