Homeowner not happy with Town’s insurance policy
While Chris Sirabian was vacationing in Florida with his family recently, a break in the water main was affecting his home on Bartlett Drive back in Labrador City. A family friend, who was watching the property, noticed water on the lawn and the distinct sound of water running inside the home—upon seeing 4 to 5 inches of water in the basement, she called the Town to report the findings.
© Michelle Stewart photo
Chris Sirabian was shocked to learn the Town’s insurance might not cover damages to his home incurred from a water main break.
While Chris Sirabian was vacationing in Florida with his family recently, a break in the water main was affecting his home on Bartlett Drive back in Labrador City.
A family friend, who was watching the property, noticed water on the lawn and the distinct sound of water running inside the home—upon seeing 4 to 5 inches of water in the basement, she called the Town to report the findings.
“The Town responded immediately,” Sirabian said. “That’s perfect on their part and they were digging first thing the next morning. I have no problem at all with how they handled the groundwork.”
At the time, Sirabian said he spoke (via phone from Florida) with the operations manager of public works, Hedley Tucker, and he felt very reassured by the conversation.
“He [Tucker] told me not to worry, that my place would be put back together by the time I came back from holidays,” Sirabian recalled the phone conversation. “So, I didn’t worry. The only thing that worried me was where the breakage had happened. From my understanding, if it was on my side, my insurance was responsible, if it was on the other side, their [the Town’s] insurance was responsible.”
It would take digging and exposing the water line to determine where the breakage occurred, and the Town had a crew in digging the morning after the report came in.
“After they dug 15 ft, I got a call from Hedley Tucker again,” he continued. “Mr. Hedley said, ‘Chris, you have no worries, you are lucky man, the damage is on our side and we will look after the damages.”
Pleased upon return home
Sirabian was relieved to hear the news and continued to enjoy the final days of his vacation with his wife and three young children before returning to Labrador City Aug. 30.
Upon his return, he was pleased to see the ground was filled, topsoil was put on and they were seeding it for grass the same day.
“When I seen this progress, it felt good you know,” said Sirabian. “Here it was five days after the break and they have my lawn all fixed up, and I felt like they are all the ball.”
That feeling didn’t last long though. Sirabian didn’t feel so good when he learned there had been no effort from the Town when it came to the damages done to his basement. No one had come to clean up or pump out the water; the only efforts to that effect were made by the caretaker who had done some cleaning.
“I still didn’t know how to approach this or the right protocol,” he said. “So I wait until Sept. 3 and I called the Town,” he said. “They (Town) advised me then to call my own insurance company. Then I started to get into a little bit of worrying about it because now all of a sudden from 100 per cent ‘not to worry and we will look after it’, now suddenly my end was getting sucked into this…meaning all of sudden I had to make phone calls and arrangements and wondered why I should have to call my insurance company.”
Sirabian went ahead and called his own insurance and was told it would be dealt with right away. In the meantime, he was told, the Town’s insurance would conduct its own investigation into the incident and a decision would be made on whether or not the Town was negligent, if so, the Town’s insurance would cover the collateral damage to the home. If no negligence is identified, Sirabian’s insurance would be expected to cover it. The whole process has Sirabian questioning the policy of the Town as well as the definition of negligence.
Town Manager Jeff Boland confirmed the protocol in place for such instances and said once the Town has done repairs to the water break, it essentially is out of the their hands and all decisions thereafter on damages to the home would rest in the hands of the insurance company and the adjuster assigned to the case.
“The Town is responsible for the cost of repairs of the water break,” said Boland. “That would involve repairs to his lawn, his driveway and if there was trees to be replaced or that type of thing. So, that has all been done, yes. If there’s any collateral damage, —like in this particular case water got into the person’s home and done damage—then that matter is normally referred to our insurance company.”
The cost of repairs carried out by the Town are paid for by the Town and not the insurance company he confirmed, and if there is negligence identified on part of the Town, then the insurance will cover the damages.
“Negligent is, for instance, if we were digging in the area and broke the main off while working and a gush of water went into his house,” Boland explained the term. “If the line eroded then, no, that would not be considered negligent.”
But Sirabian has a different definition of negligence and says the Town’s water infrastructure is getting old and he feels there should be some investments into upgrading before the problem becomes even larger.
: “I don’t think this is very fair to the citizens of this town. I think the Town, if it has such confidence that the infrastructure here is so good, they should get a better policy for their residents that offers replacement value rather than depreciated value.” Chris Sirabian
But Boland disagrees and said going in to replace water lines (just because of the age of the infrastructure) is not about to happen.
If a section of Town was plagued with water breaks, then there would be an investigation to see if that particular section needed to be replaced.
“If you get an occasional (water line) break, you can’t just go in and dig up the whole street and everyone’s lawns, driveways… and it would cost hundreds and hundreds of thousands of dollars,” said Boland. “When it comes to replacing a water main, that is not how decisions are made.”
Boland maintains the area of Bartlett Dr. where Sirabian’s home is located, is definitely not a problematic area, and he says in his 10 years with the Town, he can only recall two breaks between the Embassy and Drake and they were both close to Drake.
As for the infrastructure being old and/or dilapidated, he says in comparison to other municipalities, Labrador City’s infrastructure is relatively new.
“In my professional opinion is we definitely do not have a dilapidated system,” Boland said. “In comparison to downtown St. John’s and other cities where pipes are over 100 years old, ours is very new really.”
The life of a water main is not altogether determined by age, he explained, as there are many variables that can cause breakages.
“These (lines) were put in 40 years ago and depending on how they were installed, if the proper bedding wasn’t put under it, it could be resting on a rock, for instance and over time it wears through…there are umpteen possibilities as to why breaks happen. If there is an area that is problematic with breaks or chronic problems, we would do a cost benefit analysis to determine if it would make sense to go in and replace the water main. It is very costly and can you imagine what it would cost to replace the infrastructure, there is approximate 55 kilometres of pipe in this town.”
He pointed out that if the lines are installed properly, the quality of water going through the pipes is good, the soil the pipe is place on is ideal the pipes can last 100 years and beyond.
Coverage not good enough
Sirabian accepts the explanation of not replacing the pipes because of age but he maintains the cost of breakages, when they do happen, should not be put on the homeowners insurance rather the town.
“I can’t go out and dig up to see if the pipes are good on my property because I am not allowed to do that,” said Sirabian. “So, I can’t prevent it if there is a break so why does it have to go through my insurance.”
Sirabian says there are penalties to be sustained by policyholders, from losing discounts for a clean record to increases in premiums because of the claim as well as the deductible costs. Not everyone, he says, can afford an increase in insurance rates.
As well, Sirabian was dismayed to learn that if indeed there is negligence shown, the Town’s insurance will only provide cash value as opposed to replacement value for damages.
“So if you have a sofa set in your basement that is seven or eight years old, you might only get a couple of hundred dollars for it, because cash value means depreciated value” he pointed out. “I don’t think this is very fair to the citizens of this town. I think the Town, if it has such confidence that the infrastructure here is so good, they should get a better policy for their residents that offers replacement value rather than depreciated value.”
Same as other municipalities
Boland said the insurance company the Town of Labrador City uses—Baine Johnston Insurance—is the insurance provider for most towns in the province and the coverage typical.
“I would hazard a guess that they have about 90 per cent of municipalities,” he said of Baine Johnston. “We’ve been with them for a long, long time certainly since I’ve been with the Town.”
When it comes to having a policy that offered replacement value, Boland allowed that coverage would likely be available but said he imagines it would come at a significant cost.
“I can certainly inquire on the cost,” he said, “but I would think it would be much more expensive. If you consider the risk the company would be taking on with that.
In the meantime, Boland expects the decision from the insurance to be forthcoming very soon on whose responsibility the cost of the repairs will be.
“We certainly sympathize with Mr. Sirabian,” Boland said. “I mean, it’s certainly not a nice thing to have to face when he got home. But now, the decision rest solely with the adjuster and it’s out of our hands.”