A. Background:

Let’s say you’ve owned a house for 10 years.  You’ve spent your blood, sweat, and money to make it a castle for your family.  In that time, you’ve made major renovations and remodeling with some even requiring permits – a new bathroom, a second floor room, and some extra space to convert backyard into an in-law suite.  In that time, you’ve kept the same homeowners’ insurance and paid your premiums every year like clockwork.

One day there’s a hurricane that rips apart the roof and results in some water damage throughout the home, including all the new additions you made.  You report the claim and it’s denied.  How did this happen?  Was the denial proper?  Most importantly, what happens when the policy you bought 10 years ago no longer accurately describes the property because it’s changed so much (remodeling/renovation) over time?

B. Courts have found the denial was proper (and lawful)

This issue was addressed in a case called Alvarez Ortiz v. Universal Insurance Company, where policy did not describe coverage for a second floor built on top of the property when the claim was reported.