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Does my homeowners insurance cover construction defects? And what you need to know regarding statutes
Did your developer or a contractor perform faulty or defective work on your new home, condominium conversion, or commercial project? Many construction defects can become apparent 3 to 5 months after construction; such defects could include hairline cracks in a foundation, uneven flooring, leaky roofs and windows, moisture problems, improper draining, difficult-to-open doors or windows – to name a few. Overall, if you have an issue on your property leading to resulting damage to another part of the property, you have may have a serious construction defect.
The question is, “Does My Insurance Cover Faulty Construction?” Homeowners insurance typically will not help pay for repair. There is typically an exclusion for defective work, However, homeowners insurance may cover catastrophic floods or fires or pipe leaks. It is better not to make a claim on your own policy becauseit can drive up your premiums.
What your insurance will cover depends on the type of insurance you have and the state you live in. Many states will cover property damage but may not consider defective work as property damage. Calling your own insurance agent regarding construction defects can be very frustrating because most such damage is excluded.
According to California Law and Civil Code 895 (also known as the Right to Repair Law) the contractor/builder/developer is responsible for the defective conditions on your property. He may tell you that you only have one year warranty on the property. This is somewhat misleading. For most serious defects you have up to 10 years from the date of completion to file a construction defect claim. However, you must be on the alert. Some defects have one year, two year or four statute of limitations. Remember that the 10-year time frame starts from the date your house is substantially finished, not the date you buy the house.
In certain limited cases, you may able to get financial help from the Contractors State License Board, which is a governmental agency. However, regardless of your insurance or any assistance, your best bet is to hire a construction defect lawyer. Construction defect lawyers have experience and successful verdicts helping clients with construction defect claims.
When working with a construction defect lawyer, there are a few ways to structure the fee arrangement, from paying for professional services based on time worked and costs incurred, to a contingency fee agreement. In a contingency fee agreement, you do not pay any legal fees unless and until there is a recovery and the fees come out of the settlement Other costs of the litigation can be charged to the client but are more typically advanced by the law firm and recovered from proceeds of case resolution. Some of the investigation and analysis expenses can also be recovered at trial, if the case goes that far. A very large majority of construction defects cases settle and never go to trial.
To learn more about specific construction defects, click our Naumann Law Firm’s construction defect litigation page.
If you’re a homeowner, association or business owner seeking representation in construction defect litigation, our team at The Naumann Law Firm, PC in San Diego can help. We have more than 35 years of experience handling significant construction cases. To contact us, call 858-792-7474 or visit our San Diego construction defect contact page. We also work with clients in the Los Angeles, Orange County, Riverside, and San Bernardino areas.