A burst pipe. A flooded home. Months of waiting for reimbursement. For one California couple, what began as a routine home improvement project turned into a $120,000 financial nightmare — and a powerful lesson in how complex insurance claims can become when multiple parties are involved.
In a February 2024 ABC10 Team 10 Investigates report, Phil and Karen Wisnant of Vista shared how a contractor accident spiraled into months of stress, debt, and legal uncertainty. Insurance expert Karl Susman weighed in on what went wrong and what every homeowner should know to avoid similar outcomes.
The Accident That Triggered a $120,000 Loss
While the Wisnants were out of state, a contractor from Pro Service Insulation accidentally stepped on a fire sprinkler pipe during attic work on their newly renovated home.
“We got a frantic call asking where the water shut-off was,” Phil said. Moments later, their Ring camera recorded water blasting through the ceiling at 100 pounds of pressure, flooding nearly every room.
When they returned home, ceilings had collapsed, floors were destroyed, and personal belongings were ruined. The total cost of repairs climbed to roughly $120,000.
Who Pays When a Contractor Causes the Damage?
Because the damage was caused by a contractor, the Wisnants filed a claim with the contractor’s insurer, AmTrust Financial. They expected the contractor’s insurance to cover repairs, temporary housing, and related expenses.
Instead, they faced months of delays.
AmTrust requested a formal demand letter. Early estimates placed the damage as high as $246,000. After repairs and living expenses were finalized, the true cost settled closer to $120,000. Even after inspections and repeated communication, payment had still not been issued at the time of the report.
Meanwhile, the couple was forced to borrow money to fund repairs and housing.
“We’re spending borrowed money,” Karen said. “That’s a very unsettling feeling.”
The Critical Mistake: Paying First, Filing Later
Karl Susman identified one major misstep that complicated the claim: the Wisnants began repairs before an insurance adjuster could inspect the damage.
“The worst thing to do is to pay for it yourself and then go to your carrier,” Susman said.
Adjusters must document damage, verify cause of loss, and confirm coverage. When repairs begin too soon, critical evidence can be lost. That can delay claims, reduce payouts, or create disputes over costs.
Susman’s guidance is clear:
- Wait for the adjuster before starting major repairs.
- Take photos and videos immediately.
- Save every receipt and invoice.
- Notify insurers right away.
Why Filing With Your Own Insurer Matters
The Wisnants chose not to file a claim with their own homeowners insurance out of fear of higher premiums or possible nonrenewal.
“I didn’t want to file a claim with my State Farm agent because of all the issues going on in California,” Phil said.
But Susman explained that this hesitation may have cost them critical protection.
Most policies require prompt reporting of losses. More importantly, their own insurer could have paid the claim first and then recovered the money from the contractor’s insurer through subrogation.
“Their insurance company could pay for the damage and then go after the responsible party’s carrier,” Susman said.
By waiting solely on the contractor’s insurer, the Wisnants absorbed all financial risk during the dispute.
The Hidden Danger of Delayed Reporting
Most insurance contracts require that losses be reported “as soon as practicable.” Failing to meet that standard can give insurers grounds to deny or delay payment.
“If you delay, it can look like you didn’t mitigate your losses,” Susman said.
Even when another party is clearly at fault, homeowners should still notify their own insurer immediately and follow written instructions on how to proceed.
Delays complicate investigations, slow payouts, and weaken the policyholder’s position.
Key Lessons for All Homeowners
The Wisnants’ experience highlights several critical principles every homeowner should follow after property damage:
- Report damage immediately. Notify your own insurer even if another party caused the loss.
- Do not start major repairs before inspection. Only perform emergency mitigation to stop further damage.
- Document everything. Photos, videos, emails, invoices, and timelines all matter.
- Do not fear using your policy. Insurance exists to protect you during major losses.
- Understand subrogation. Your insurer can recover funds from the responsible party after paying your claim.
These steps protect your legal rights, cash flow, and long-term financial stability.
A Strained Claims System Adds to the Risk
The Wisnants’ delays also reflect broader stress in California’s insurance system. Rising construction costs, repeated natural disasters, labor shortages, and regulatory pressure have slowed claim resolution across the state.
At the same time, many homeowners are now afraid to file claims due to fears of nonrenewal or premium hikes. That hesitation often leads to self-funded repairs, delayed reporting, and weaker claims — exactly the outcome insurance is meant to prevent.
As Susman noted, the system only works when homeowners engage it promptly and correctly.
Conclusion: File Early, Document Everything, Use Your Coverage
Phil and Karen Wisnant rebuilt their flooded home, but their finances remain tied up in a prolonged insurance dispute. “You feel very powerless,” Karen said. “Powerless, but hopeful this will be behind us soon.”
Their story delivers a clear warning for all homeowners: insurance protection only works when it is activated early, properly, and with full documentation.
Filing quickly, involving your own insurer, and allowing the claims process to function as designed can mean the difference between financial recovery and ongoing regret.
As Karl Susman summed it up: the worst risk isn’t filing a claim — it’s trying to handle a major loss alone.
