Reader S finally got his homeowner’s insurance company to pay up for the rebuilding of the glass railings around his condo, thanks to a well-crafted and scary letter he wrote them. Here is his story, and his ass-kicking letter.

Dear Consumerist,

I have been a long time reader and have found many of your entries very informative, educational and inspiring. I am emailing you today is to share a recent victory with my homeowner’s insurance company.

The story begins with several instances of mysterious glass breakage on the glass balcony railings of our 5-year old condominium building. Ultimately the NYC Department of Buildings steps in and mandates that our condo must update all of the railings to conform to a recent revision of the building code. Our condo complies with this order and obtains partial compensation from the condo builder and the condo’s master insurance company and then turns to the condo residents to foot the rest of the bill through a series of monthly special assessments. In turn, I submitted a claim online to my homeowner’s insurance company because the fine print of the all-risk policy includes coverages relating to “unit assessments”, “glass breakage” and requirements to “rebuild to code”. I am probably one of the few people who actually reads the 60 page policy from cover to cover every year looking for these kinds of paragraphs.

My claim was handled quite fast, though the claim was denied several times as I continued to cite the relevant policy coverages and escalate the matter to more senior adjusters. Ultimately, after 4 months I receive a written letter denying coverage because “It appears [the damage] was due to possible faulty construction and deficiencies.”

Inspired by articles I have read on Consumerist about taking large companies to small claims court, I started to conduct some research on how to sue in small claims court in NY, the legal issues involved with homeowner’s policies and insurance policies in general. I learned that the costs to file in small claims court are low, the submissions can be done online and the amount of my claim wasn’t too high for small claims court. I also learned that there is an extremely high burden of proof for insurers with “all-risk” policies and many legal precedents (and articles) to support this matter of law. In essence, the insurer has to prove that there was a construction defect, and I knew this was impossible for them to do (in fact, I had an engineer’s report citing that the cause of the damage cannot be determined). Armed with all of this research, I drafted a letter (redacted form below) to my insurance adjusted citing the relevant matters of fact and related matters of law. I did not threaten to sue, but I am sure the tone of the letter made it obvious that would be the next step.

One day before the deadline in my letter, I got a phone call from the insurance adjuster saying that my claim was approved. This was a great victory for me, as I recovered several thousand dollars with a minimal amount of work on my part. Moreover, I have shared my victory with some of my neighbors, who have filed claims and been approved within a week. While I was able to recover several thousand dollars, my neighbors collectively may recover more than one million dollars!!

Thanks again for providing a lot of great information and motivation on your site. I am not a lawyer and do not have any legal training, and I hope this story will motivate others to stick up for their rights against large companies.

Here is the letter he wrote to his insurance company that got results:

[DATE]
[To: Insurance Company]
Re: Claim # [ ]
Dear Mr. [Adjuster],

I have received by electronic mail your letter dated [ ] (the “Letter”) denying coverage for the above referenced claim that I filed (the “Claim”) and present the following observations for your consideration:

1.) As you mention in the Letter, my insurance policy #[ ] underwritten by [underwriter] for the policy period of [ ] to [ ] (the “Policy”) is an “all-risks” policy. The Policy includes coverage for unit assessments resulting from an occurrence that would have been covered under the Policy to property collective owned by all unit Owners. Further, the Policy includes specific coverage for “Rebuilding to Code” after a covered loss.

2.) As we discussed upon your review of the condominium offering plan, the balconies and railings are residential limited common elements that are owned by all residential unit owners, which would satisfy the requirements for the unit assessments coverage.

3.) In the Letter you do not disagree with the statement of fact that the New York City Department of Buildings (“DOB”) required the condominium to rebuild all of the balconies to the 2008 New York City Building Code (the “2008 Code”) which superseded the 1968 New York City Building Code that had been in effect when the condominium was designed and constructed.

4.) According to the June 7, 2011 letter from [Architect], the independent architectural firm hired by the condominium to repair the balconies, the DOB required that all of the balconies be rebuilt to the new 2008 code as mandated by the change in occupancy status resulting from the DOB’s partial vacate order that was issued after an incident of glass breakage of unknown cause on the western façade of the condominium on July 1, 2009.

5.) You cited in the Letter certain exclusions to the Policy with the headings of “gradual or sudden loss” and “faulty planning, construction, or maintenance” thereby implying that these exclusions apply to the Claim. You further state in the Letter that the DOB’s requirement to rebuild to the 2008 code “It appears this was due to possible faulty construction and deficiencies”. However, this statement contradicts the statements made by [Architect] in their July 2009 report. Additionally, you fail to provide definitive proof to demonstrate that any of these exclusions in the Policy apply to the Claim. The use of the terms “appears” and “possible” further support my assertion that you do not have definitive proof that the cited exclusions apply to the Claim.

6.) New York law recognizes that an essential purpose of all-risks insurance is to provide coverage when the exact cause of the loss cannot be established, as in the case of my Claim. “All risk insurance arose for the very purpose of protecting the insured in those cases where difficulties of logical explanation or some mystery surround the loss or damage to property” Formosa Plastics v Sturge, 684 FSupp 359, 366 (SDNY 1987).

7.) As required by New York law, I have established that an all-risks policy was in place and the loss was fortuitous and occurred on the covered property by providing documentation (as summarized above) in the form of condominium account statements and letters from the condominium board of managers and FSA, the design architect hired by the condominium.

8.) New York law further explains that the insurer has the burden to prove, both as a matter of fact and as a matter of policy interpretation, that the loss was caused by something clearly excluded in the Policy. In Great Northern Ins. Co. v Dayco Corp., 637 FSupp 765, 777 (SDNY 1986) the court stated: “Once the insured has established a prima facie case, the insurer must prove that the claimed loss is excluded from coverage under the policy; the insurer must show that the loss was proximately caused by the excluded peril. The burden on the insurer is especially difficult because the exclusions will be given the interpretation which is most beneficial to the insured.” Similarly Simplexdiam Inc. v. Brockbank, 283 AD2d 34, 39 (1st Dept. 2001) stated, “Under an all risks policy an insured need not prove the cause of the loss and is not bound to go further and prove the exact nature of the accident or casualty which, in fact, occasioned the loss.” See also Congregation Beth Torah v. Graphic Arts Mutual Ins. Co., 739 NYS2d 454, 455 (2d Dept. 2002) which states that “defendant [insurer] failed to meet its burden of proving that the loss was within the scope of the policy exclusions it sought to impose”
Based on the observations and applicable legal precedents cited above, I kindly ask that you reconsider and approve my Claim or otherwise provide definitive proof that an exclusion to the Policy applies to the Claim, as applicable under New York law. Please contact me by [ ] with your response to this letter.

Sincerely,

[Homeowner]

Nicely done, S. You backed up your arguments with relevant quotes from both policy and case law and made it clear you had a complete trail of evidence to support your claims. They probably looked at it and said, damn, we do not want to keep fighting this guy, he’ll really have us in a vice.

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