If a basement water remediation system fails due to improper installation, can the homeowner’s insurer request reimbursement from the remediation company for damages that were covered and paid to the homeowner?

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If a basement water remediation system fails due to improper installation, can the homeowner’s insurer request reimbursement from the remediation company for damages that were covered and paid to the homeowner?

The system failure occurred because the installers used the original discharge pipe that was below grade, and connected a pipe to it at 90 degrees then out into the yard. Due to the bend in the pipe, sediment built up and solidified in the discharge pipe. Upon evaluation the remediation admitted the system was installed incorrectly and has no documentation of how the system was installed. The company blamed me for the

failure indicating it was because I didn’t have their annual maintenance plan. Although they corrected the problem today, I feel the company should compensate me for paying for a job that left me with damage. Since they refuse to consider compensation, my question was to see if the insurance carrier can hold the remediation company responsible for the damages reimbursement.

Asked on January 30, 2019 under Real Estate Law, Pennsylvania

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

 IF your homeowners paid out a claim to you for this damage, then the insurer would have the right to seek reimbursement of what they paid to you from the installer. You would not get that money--since in this scenario, you received your money from your insurer--but rather the insurer gets it to reimburse them for what they paid to you; this is called "subrogation."
If you have not been paid out by insurance, you could sue the installer to recover any damages or costs you incurred; as long as you can prove that the company was at fault (e.g. the problem occured due to poor installation and not due, for example, to your failure to have maintenance done), you'd have a good chance of recoverin compensation from them.


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