If an incident occurs and they identify additional components connected to the "trigger" you'd have to provide the whole "paper trail" for every single bit of your setup and show that it's above board: were the components certified for the use, were they installed by authorized personnel, were they operated properly, was the code you wrote for it to blame, etc. If you handled all the implementation yourself then it's hard to pass the responsibility along. While not impossible, it's still a high bar. And you wouldn't be in the best position to fight.
If it's an electrical fire and they find modifications to the electrical wiring the chances of getting the insurance money are slim. Unless those modifications are explicitly covered by the insurance.
Given the kind of exposure insurance companies have they are willing to invest a lot in fighting the payout. It's their business model.
> you'd have to provide the whole "paper trail" for every single bit of your setup
Can you cite any firsthand account of this sort of thing happening somewhere in the US? Given the ease with which people can reach millions of people with their tale of woe/outrage the fact that such stories are not readily available on social media makes me think this is mostly urban legend.
Not sure I understand, you think it's an urban legend that an insurance company will do what it can to avoid a payout especially when the incident involves unauthorized modifications to the electrical wiring of the house, which ended up triggering a fire?
There's no need to cite firsthand accounts, you will find this in your own insurance contract. Insurance works pretty much the same everywhere, unauthorized modifications (especially to critical systems) usually invalidate any insurance claim when they can be linked to the incident. [0] Electrical wiring, plumbing, structure of the building, safety or security systems, etc. And it makes perfect sense if you think about it.
I believe it is an urban legend that homeowner's insurance claims (specifically fire damage to structure or other contents) are being denied with any frequency because a 'homebrew' contraption was present in the home, adjacent to the start of the fire, or even the source of ignition.
Exclusion B on page 12 is probably the relevant section. It excludes loss due to "Faulty, inadequate or defective:... workmanship, re-
pair, construction, renovation, remodeling,..." but also contains an "ensuing loss" exception.
> A classic example [of an ensuing loss exception] is if faulty repair resulted in improper wiring and the improper wiring caused a fire. Almost every insurer would pay for the fire damage, but not for the repair of the improper wiring.
1) The insurance company will more often than not sue the party responsible for the faulty workmanship that triggered the incident to recover the money (I've seen this happen). In this case the owner is that party.
2) One real example is enough to show it's not a legend and you provided it yourself:
> Some courts have upheld this rather cramped reading of the exclusion, while others construe it properly and require insurers to pay for the water damage
Since it's upheld in court I find your statement that it's an urban legend pretty confusing. It's like showing a picture of the night sky to prove the Sun is a myth.
YMMV of course, you should read your own contract to see what's stipulated and how comprehensive it is, and case law in your jurisdiction to see if courts would rule in your favor. But better be safe and start from the assumption that the "urban legend" is real since courts support it. It's the kind of legend that might cost you money.
Are you saying you know of an instance where an insurance company sued their own customer for accidentally burning down their own house? I'd like to know more about the particulars because that sounds like another urban legend.
Another? Didn't we clear this one already above when your link showed courts upheld the "legend"? Are you contradicting me or the courts? Feels like you're no longer looking for any evidence, just grasping at straws.
Plenty of resources that tell you that it's perfectly possible to get no payout (depends on your contract of course)[0][1]. Or they will pay out but capped to a low figure [3]. Again, read your contract and decide what applies to you, pray there's no fineprint to screw you over.
P.S. No, I do not know any cases where the owner was sued but I do know many cases where the insurance company payed out and then sued the company that did the faulty repairs to recover the entire payout. I also know one case where a faulty repair done by the owner caused a fire that injured the tenant - the owner was found guilty of recklessness/gross negligence (no idea about the insurance in that case).
> "you think it's an urban legend that an insurance company will do what it can to avoid a payout"
First-party claims, absolutely. Insurers want to pay when they are liable, and they don't want to pay when they are not. Your contract defines that, and your contract is written in plain English.
Insurers aren't out to get you, and the insurance industry doesn't rely on shafting people to make money. When you purchase insurance your policy is priced according to the exposure it creates, but a lot of people mistakenly assume that the insurer's profit comes from premium payments. It often doesn't. From what I have read, insurers are generally happy to break even on premiums vs. payouts. Their profit comes from investing the float and earning a return on those investments.
Related, I think that most people don't understand how tightly regulated insurance is, and how much it can suck for an insurer to improperly deny a claim. It creates huge legal and regulatory exposure for the insurer.
Indeed they are not. They are out to maximize profit either by not paying out when possible (sometimes only if forced by the court), or by paying out and recovering the money from the party to blame for the damage (in this case also the owner). And as the links provided below show, many courts see it their way and consider that damage cause by faulty workmanship is not covered by insurance.
I've done my part, the court supporting my claim shows it's as real as it gets. If you want to support your claim that it's an urban legend all you have to do is show that this never actually happened.
The relevant court decision in that link related to faulty construction resulting in water incursion over months/years. I don't see how that is at all analogous to the scenario we have been discussing (DIY smart outlet malfunctions, house burns down).
If it's an electrical fire and they find modifications to the electrical wiring the chances of getting the insurance money are slim. Unless those modifications are explicitly covered by the insurance.
Given the kind of exposure insurance companies have they are willing to invest a lot in fighting the payout. It's their business model.