Bowers Street Insurance Claim From Hell

Following is a letter I wrote and mailed to the Massachusetts Insurance Complaint Department. It's a chronological account of the events that occurred between January 24th and February 3rd, 2005. The end result? I received a letter 13 months later (this March) stating that I wasn't covered, so I was responsible for paying all $16,000 worth of bills. I learned my lesson: read your insurance policies and know what’s covered. And what isn't. Trust no one, unless it's in writing.

Monday, January 24th

8:00 AM
Upon arriving at 9 Bowers ST, I discovered the fire alarm had gone off. After entering the first floor, I discover water pouring down into the bathroom, kitchen, and bedroom. By that time, there was already 6” of water on the floor. I run to the second floor and discovered the same thing; water pouring down into the bathroom, kitchen, and bedroom. I noticed a slight haze of smoke from what smelled like an electrical fire. After discovering more smoke in the third floor I called the fire department and reported the problem. The fire department arrived, shut off the main water valve, and turned off the electricity and gas for the entire building.

11:00 AM
I contacted my Insurance Agency, James L. Coony Insurance, and explained to them that the water pipe’s had burst and destroyed the first and second floor kitchen, bathroom and bedroom. They pulled up my insurance policy number for that property, located on 9 Bowers ST, and told me that they will send the claim to Massachusetts Property Insurance and that an Insurance Adjuster would contact me within 2 – 3 hours.

2:00 PM
I received a call from Michael Brady with Heritage Claim Services. He explained that he was with Massachusetts Property Insurance and that had received my claim. He setup an appointment to come look at the damage at 4:00 PM the same day.

4:00 PM
Michael Brady and I met at 9 Bowers ST and Michael reviewed the damage. I explained to him that this was a very urgent situation because I had spent the past two months interviewing tenants to rent all three floors in the building, I had security deposits and rental agreements from three tenants, and they were all supposed to move in at the end of the week. Michael wrote down on two full pages all the damage that needed to be repaired and informed me that it was over $10,000 worth of damage. Michael insured me that it would be covered by the insurance company and he referred me to ServPro Cleanup & Restoration to clean up the broken tiles, and remove the sheetrock and insulation that had been destroyed from the water.

I called ServPro and setup an appointment for 2:45 PM the following day to have Eric West view the damage and decide what needed to be cleaned up. I also contacted Mark Hodges with M&J Plumbing and setup an appointment to meet him the following day at 1:30 PM.

I turned the electricity and the gas back on later that night and made sure the heat was working again to prevent further damage.

Tuesday, January 25th

1:30 PM
I met with Mark Hodges from M&J Plumbing at 9 Bowers ST. He reviewed what work needed to be done to fix the plumbing. I explained the urgency and he informed me that he would start working tomorrow morning and finish by the following evening.

2:45 PM
I met with Eric West from ServPro Cleaning & Restoration at 9 Bowers ST. He used a moisture meter to determine which walls and floors would need to be replaced. I explained the urgency and he called one of his crews to come by later the same night to start cleaning up. He also ordered a 30 yard dumpster from NorthEast Recycling to be delivered for Thursday morning and picked up Friday morning. He scheduled two of his crews to work all of Thursday removing the ruined sheetrock on the walls, and the ruined carpets and ceiling tiles. He also explained to me that since he’s worked with Michael Brady in the past, he just sends the bill directly to Michael Brady and that I do not see or receive a bill at all. Eric West also gave me the name and number of Jerry Pesaturo from City Wide Restoration, and recommended I call him in regards to starting the repairs on the house.

I called and left a message for Jerry to contact me.

Wednesday, January 26th

10:00 AM
Jerry Pesaturo contacted me and setup an appointment to meet me at 11:30 AM the following day at 9 Bowers ST to review the work that needed to be done.

1:00 PM
An Insurance adjuster from Butterworth & O’Toole called and informed me that he had received my claim from the insurance company and wanted to setup an appointment to come look at the damage. I was puzzled, and informed him that an Insurance Adjuster, Michael Brady from Heritage Claim Services, had already contacted me, reviewed the damage, and was working on my claim. The adjuster informed me that sometimes the insurance company sends the claim out twice. He said he would call the insurance company and confirm that Michael is working on the claim. He informed me that he won’t call me back unless everything is all set. I never received another call from Butterworth & O’Toole.

Thursday, January 27th

8:00 AM
ServPro arrived and started work on the first and second floor of 9 Bowers ST.

9:30 AM
Jerry contacted me and informed me that he had just been in a car accident, and that he was on his way to the hospital. He said he would call me back later that day.

10:30 AM
NorthEast Recycling delivered the dumpster and ServPro continued their work, removing all the sheetrock, carpets, and anything else that had been damaged from the water.

1:00 PM
Jerry contacted me and setup an appointment to meet me at 11:00 AM the following day at 9 Bowers ST to review the work that needed to be done.

During the night, ServPro left dehumidifiers running on both the first and second floor to dry up the moisture.

Friday, January 28th

11:00 AM
I met with Jerry Pesaturo and he reviewed everything that needed to be repaired. I explained to him the urgency and he said he would start working tomorrow. He called Michael Brady and asked him for some kind of assurance that the insurance company would be paying for this work. After writing up his estimate, Jerry faxed it to both Michael Brady and me. After reviewing the estimate, Michael Brady told Jerry that his estimate was acceptable and then gave Jerry the go-ahead to start on the work. At this time, I then signed the estimate that Jerry had prepared to give him authorization to start on the work.

Saturday, January 29th

Jerry Pesaturo and his crew worked all day on repairing the second floor. I requested that they start on the second floor because those tenants informed me they needed to move in no later than February 5th. The first floor tenant was reluctant, but willing, to wait until February 15th to move in.

Sunday, January 30th

Jerry Pesaturo and his crew continued to work all day, and completed most of the second floor.

Monday, January 31st

Jerry Pesaturo and his crew started work on the first floor.

8:00 PM
Jerry Pesaturo contacted me and informed me that it was costing him a lot for all the materials, and he needed an advance of $4800 to continue working. I called Michael Brady to confirm that when the insurance money comes through, that it will go directly to me and not directly to Jerry. Michael was unavailable, so I left a voicemail.

Tuesday, February 1st

8:00 AM
Jerry Pesaturo and his crew worked on the second floor.

12:30 PM
I had still not heard back from Michael Brady so I called him again. This time he was available, and I explained to him that Jerry had asked for an advance of $4800. He explained to me that the insurance company sends the money directly to me, and I then pay the contractors myself. He confirmed that I would be OK to give Jerry the advance of $4800.

3:00 PM
I contacted Jerry and setup an appointment to meet him at 7:30 PM the same evening to give him the $4800 advance.

7:30 PM
I met with Jerry and gave him a check for $4800. He showed me the progress that had been made on the first floor. Most of the first floor had been completed.

Wednesday, February 2nd

8:00 AM
Jerry Pesaturo and his crew worked on, and finished, the second floor.

2:30 PM
Michael Brady called and left a voicemail on my cell phone informing me that it had taken him a long time to figure it out, but I am not covered for broken water pipes on my insurance policy. He also said that I have the cheapest policy I could buy, known as a DP1, and that it does not cover broken water pipes.

Thursday, February 3rd

11:30 AM
I contacted my Insurance Agency, James L Coony Insurance, and informed them what had happen. They pulled my Insurance policy, and confirmed that I had a DP1 insurance policy. They stated that Massachusetts Property Insurance does not provide any other insurance policy for non-owner occupied properties that cover broken water pipes.

2:30 PM
I called back Michael Brady and asked why something like this would happen. He explained that because my insurance agent reported the claim to Massachusetts Property Insurance the day after the big blizzard, the insurance company in Boston was closed and so the claim went to an emergency claims office. This emergency claims office sent the claim to Michael Brady who then contacted me the same day. After the insurance company reopened, the emergency claims office failed to report to the insurance company that they had already assigned an adjuster to my claim. Because the insurance company was unaware that an adjuster had already been assigned to my claim, they assigned another adjuster, Butterworth & O’Toole, to my claim and never contacted or sent any information to Michael Brady.

When I originally purchased the property on 9 Bowers ST, the only piece of information that was given to me by my insurance agent was a faxed Proof of Insurance that the mortgage company required before closing the loan. I feel that I was mislead by the Insurance Company because no one explained what was covered by the policy or even what policy I would be receiving for the property. I was never mailed a copy of the insurance policy and until this day, all I have is a webpage printout summarizing what my policy covers.

I would not purchase an insurance policy for a three family investment property that does not cover something as common as broken water pipes, and had I been made aware that Massachusetts Property Insurance did not offer such a policy, I would have obtained a policy from a different insurance company.

In addition to this, the insurance company should have contacted Michael Brady with the policy coverage information within a reasonable time frame, not 10 days after the claim had been filed and $18,000 worth of work had been completed on the rental units.

Had I known, within 24 – 48 hours of filing the claim, that my insurance policy did not cover broken water pipes, I would have done the bare minimum to return the rental units to move-in condition. This event happened exactly one week before tenants were scheduled to move into all three rental units. When I explained this urgency to Michael Brady, he advised me to begin work immediately and even recommended ServPro Cleaning & Restoration to start the clean up work. He made no indication that there was any possibility I was not covered. I have never had to file an insurance claim before, so I trusted Michael Brady when he informed me it was safe to start on the work. I now have several contractors that want to be paid, and it is impossible for me to come up with the money.

Raam Dev

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  1. Raam’s correct, check your policy and see what they are covering, also check to see what they have listed for YOUR PLACE. Corporate sent out someone to check over the house to see if they were covering my house correctly.

    I get a paper from them saying that my rate is increasing because they found the following: (inspection was done outside of my house)
    HUGE skylights
    Bay Window
    2 Air Condition Units
    1/2 bath
    and if I did not fix the roof of my 1 car detach garage they were cancelling my policy.

    I have no fireplace, only 1 AC unit, no skylights or bay windows, and would love to have a 1/2 bath. As for the garage, my house was for sale. If it sells, I do nothing with the garage. If the house doesn’t sell, garage gets torn down and I build a 2 car garage. Agent understood and contacted the underwriter and explained. The agent also found one of the errors above for me.

    Farmers Mutual needs to get new inspectors or educate the current ones better.

    some wonder if they looked at the wrong house. But I was there when he was looking at my place and he even took pictures of the house before writing the report. For the new house, I’m insurance shopping 🙂