(Airdate: 2024-02-02) ABC - KGTV - Couple Tries To Recoup $1000's From Insurance After Home Floods

Published Date: 02/02/2024

When Water Damage Strikes: What Homeowners Can Learn from One Couple’s Costly Insurance Battle

A burst pipe. A flooded home. Months of waiting for reimbursement. For one California couple, what began as a home improvement project turned into a $120,000 financial nightmare — and a cautionary tale about how complicated insurance claims can become when disaster strikes.

In a February 2024 ABC 10 Team 10 Investigates report, homeowners Phil and Karen Wisnant of Vista shared how a single accident during an insulation job spiraled into months of stress, debt, and uncertainty. Their story highlights what many homeowners don’t realize until it’s too late: filing an insurance claim is rarely simple — especially when multiple parties are involved.

To help unpack the lessons from this case, ABC 10 turned to insurance expert Carl Sussman, who explained what went wrong, what should have happened, and how other homeowners can avoid the same pitfalls.

The Accident: “It Was a Frantic Afternoon”

Last October, the Wisnants were out of state when they received a panicked call from Pro Service Insulation, a contractor performing attic work on their recently renovated home.

“He was frantic,” Phil recalled. “He said, ‘Can you tell me where the water shut-off is? One of the guys stepped on the fire sprinkler piping, and it’s flooding the house.’”

Their Ring camera footage captured what happened next: water gushing from the ceiling at 100 pounds of pressure, soaking walls, furniture, and floors. The deluge caused ceilings to collapse and spread through nearly every room.

When they returned home, the damage was devastating. The couple estimates the flooding destroyed most of their flooring, drywall, and cherished personal belongings — with total repairs costing about $120,000.

The Insurance Maze: Who Pays When Contractors Cause the Damage?

The Wisnants quickly discovered that getting reimbursed for property damage isn’t always straightforward — even when someone else is clearly at fault.

Because the flood was caused by a contractor’s error, the couple filed a claim with AmTrust Financial, the insurance carrier for Pro Service Insulation. They hoped the company would reimburse them for repairs, temporary housing, and other expenses.

But months later, they’re still waiting.

“We’re spending borrowed money,” Karen told ABC 10. “That’s a very unsettling feeling.”

The couple says AmTrust asked for a formal “demand letter” outlining how much they were seeking. Unsure of their final costs, they initially estimated the loss at $246,000. But as the months dragged on, and after paying contractors and living in temporary rentals, the total came closer to $120,000.

Despite repeated communication and a recent inspection by AmTrust, the Wisnants have yet to receive payment. The insurer told ABC 10 that its team has been “working diligently” and “looks forward to an amicable resolution.” Pro Service Insulation said it’s also working to resolve the matter and blamed the incident on a faulty sprinkler connection, something the Wisnants dispute.

The Expert’s Take: “Don’t Pay for It Yourself and Then Go to Your Carrier”

Insurance expert Carl Sussman, who frequently advises homeowners on claims and coverage disputes, said the Wisnants made one critical mistake: they started repairs before their insurance company’s adjuster could inspect the damage.

“The worst thing to do,” Sussman said, “is to pay for it yourself and then go to your carrier.”

While it’s understandable to want to act fast after a disaster, doing so can complicate or even jeopardize your claim. Adjusters need to document damages, verify causes, and determine whether policies cover certain losses. If you start rebuilding before they arrive, key evidence may be lost, and insurers may question costs later.

Sussman’s advice is clear:

• Wait for the adjuster before beginning any major cleanup or construction.
• Document everything — photos, videos, and receipts.
• Communicate immediately with your own insurer, even if another party is technically at fault.

“Insurance companies want to know what happens right away,” Sussman explained. “That allows them to take steps to prevent further damage and start working toward a resolution.”

The Missed Opportunity: Filing a Claim Through Their Own Policy

The Wisnants decided not to file a claim with their own homeowners insurance, fearing higher premiums or possible cancellation.

“I was extremely hesitant,” Phil said. “I didn’t want to file a claim with my State Farm agent because of all the issues going on in California with insurers.”

That hesitation is understandable — California homeowners have faced years of turmoil as major insurers cut back on policies, raised rates, or exited the market altogether. But in this case, Sussman said it might have been a costly mistake.

“If there’s a claim or a loss, most insurance policies require you to let your carrier know right away,” he said.

That’s because your insurer can pay the claim upfront and then pursue the at-fault party’s insurance company later through a process called subrogation.

“Their insurance company could pay for the damage,” Sussman explained, “and then go to the other responsible party’s insurance company and try to recoup the money.”

By not filing with their own carrier, the Wisnants effectively took on all the financial risk themselves while waiting for AmTrust to make a decision.

The Hidden Risk: Waiting Too Long to Report a Loss

Another issue Sussman highlighted is timeliness. Most insurance policies include a clause requiring policyholders to report damage “as soon as practicable.” Waiting too long can give insurers grounds to deny or delay claims.

If the Wisnants’ damage had been directly related to their own property or system failure — like a burst pipe inside their home — failing to notify their insurer promptly could have been fatal to their claim.

“Delays in reporting can make it look like you didn’t mitigate your losses,” Sussman said. “And that’s something insurers watch closely.”

Even when the cause seems obvious — as in this case, a contractor accident — homeowners should still alert their insurer immediately and seek written guidance on next steps.

Lessons for Every Homeowner

While the Wisnants’ story is uniquely frustrating, the challenges they faced are common in today’s insurance climate. Here are the key takeaways for any homeowner dealing with unexpected property damage:

1. Report Damage Immediately — Even If Someone Else Caused It

Don’t assume another party’s insurer will handle everything. Notify your own insurance company within days of the incident. They can guide you through next steps, ensure proper documentation, and begin subrogation later.

2. Don’t Start Repairs Until the Adjuster Arrives

Unless there’s an immediate safety issue, wait until an insurance adjuster inspects the property. If emergency work is necessary to prevent further damage (like drying out water or stopping leaks), document every step with photos and invoices.

3. Keep Detailed Records

Every email, photo, and receipt matters. Organize your documentation in one place and share copies (not originals) with adjusters and contractors.

4. Don’t Be Afraid to File a Claim

Many homeowners hesitate to file claims for fear of higher premiums or policy nonrenewal. But in major loss situations, that hesitation can lead to greater financial harm. If the damage is extensive, use your coverage — that’s what it’s there for.

5. Understand Subrogation

Subrogation allows your insurer to seek reimbursement from another party’s carrier after paying your claim. This process protects your finances while ensuring accountability for those responsible.

The Broader Trend: Delays, Disputes, and a Stressed System

The Wisnants’ ordeal also reflects a larger issue within California’s property insurance market: a system stretched to its limits.

Rising costs, increased litigation, and labor shortages have slowed claim resolutions statewide. Insurers face growing pressure from regulators to process claims faster, but many are still navigating backlogs and staffing challenges after years of wildfire and flood-related disasters.

At the same time, consumer hesitation — fueled by fear of policy cancellation — has led some homeowners to self-fund repairs or delay filing claims. While understandable, this often backfires, creating longer delays and greater personal losses.

As Sussman noted, “The system only works when you let it work. If you don’t report damage, insurers can’t do their job — and you’re left paying out of pocket.”

Conclusion: Be Proactive, Not Reactive

For Phil and Karen Wisnant, the ordeal is ongoing. Their flooded home has been rebuilt, but their finances remain in limbo as they wait for reimbursement. “You feel very powerless,” Karen told ABC 10. “Powerless, but hopeful this will be behind us soon.”

Their experience underscores a critical truth for California homeowners: Insurance is a partnership — but it only works when both sides engage early and correctly.

Filing quickly, documenting thoroughly, and understanding the process can mean the difference between recovery and regret.

As Carl Sussman put it best: “The worst thing you can do is go it alone.”