16 Apr 2013

When Life Gives You Lemons: Part 2

If you missed Part 1 of this saga you can catch up here.

When we left off, the RCMP was at the front door of our rental house watching the water pour down from the second floor into the kitchen.....

We couldn't reach our local contact who had a key to the house, and waiting for him to call us back wasn't an option.  The RCMP Officer ended up calling a locksmith who was able to drill through the deadbolt and open the door.  The RCMP Officer told us that there was 2 inches of water sitting on the hardwood on the main floor and 4-6 inches of water in the basement.  Water was dripping from the ceiling in the kitchen.  The tape from the ceiling drywall was so wet that it had fallen off and was laying on the floor. Crap! Not good.

The worst part was that we were 3 hours away, so we were hearing all of this by phone.  All I wanted to do was jump in the car and go see it, but I knew that wouldn't do any good.  We called our insurance agent right away and started a claim.  

The next couple of hours seemed to fly by.  After multiple calls, we found out the house was empty and there hadn't been anyone living in it for at least a month.  This wasn't too alarming to us since we knew that the company we rented it to had people come and go.  Our lease agreement with the company said that they were responsible for the house if it was vacant or not.  They continued to pay rent and assumed responsibility for the property even when it was vacant.

Our insurance agent set up a restoration company to head out to look at the house right away and get started with the restoration.  Mid-afternoon we received a call from the Project Manager with the restoration company.  He said it wasn't good.  The 2 toilets upstairs had frozen and blown apart, which resulted in water spewing out of them.  The carpet upstairs was soaked, water was in the ceiling between the 2 floors, the kitchen cabinets were drenched, the hardwood was already buckling, and the basement was flooded.  

The Insurance
Late afternoon that same day we received a call from the insurance adjuster (our first call from her).  She asked us a bunch of questions about our tenants and how long the property had been vacant for.  We weren't able to tell her when someone had been there last.  She said the restoration company had told her that it looked like everything had frozen, which is what caused the pipes to burst and the resulting flood.  The last thing she left us with at 5pm on a Friday was that our insurance coverage was in question.  

I had already cried earlier that day, but then I really cried.  What were we going to do if insurance didn't pay?  This wasn't just a little puddle.  Even just 12 hours into the crisis we knew that there was MAJOR damage.  I felt really sorry for us for a while.  Then we picked ourselves up and carried on for the weekend.  We kept telling ourselves that we had the most money in the bank that we ever had, so we'd be ok.  We could make it work no matter what - we had to!  I saw everything we had been planning for months just go down the tubes......

We signed the emergency work order for the restoration company to start work.  They needed to get in there right away to get the fans and the dehumidifiers going to dry everything up before mould started to grow.  The one thing we had going for us was that it was the middle of winter, so it wasn't hot enough for mould to flourish.  The restoration company said they would do the minimum amount possible for now since they knew that insurance coverage was in question. 

Early the next morning Mr. Swell made the first trip to see the house.  It was in a sad state.  These pictures don't due it justice, but they will hopefully give you an idea of where we were at. 

The kitchen.  The blue things are drying fans and dehumidifiers.
The water had come down through the ceiling into the cabinets.  You can see the water marks on the bottom of the cabinets.

Parts of the ceiling had been removed to allow air to circulate.

The hardwood was buckling.
Ice did this!

This is in the garage.  There was so much water in the bedroom above the garage that icicles had formed.
The outside of the house. You can see the water had started seeping through the foundation from the inside.
We both took the Monday off of work to drive the 3 hour trip again and meet with the restoration company and the insurance adjuster.  The final verdict after a bit more investigation was that the furnace had turned off, which resulted in the pipes freezing and bursting.  Since the house had been vacant for so long, nobody caught that it was getting so cold inside the house.

As soon as we met the adjuster, she showed us a copy of our insurance policy which stated that during the 'regular heating season' if the house was vacant for more than 4 days, then it needed to be checked every 24 hours after that.   We had NO idea.  We knew that houses needed to be regularly checked (every 72 hours we thought), but were not aware of the every 24 hours policy.  It's our fault - we obviously didn't read the policy clear enough 5 years ago.  We gave the adjuster everything we had showing that it was the tenant's responsibility to ensure the safe keeping of the house.  We truly felt that we had done our due diligence in ensuring that the house was taken care of.  We left that meeting with an informal answer from the insurance company that our coverage would not pay.

We met with the restoration company again because we had to decide what our next steps were.  What choice did we have?  We had to get the house put back together and we had to ensure that it was done correctly.  We were also 3 hours away, so it wasn't an option for us to deal with everything hands on.  We gave them the go-ahead to do what they needed to do, and that we would figure out how to pay for it. 

The next few days were filled with very little answers (and very little sleep)....3 days later we finally received confirmation that our policy was not going to pay.  We were found at fault of not ensuring that the house was checked.  We didn't have a specific clause in our lease agreement that said the tenant had to check on the house every 24 hours, so the insurance company felt that we didn't have enough proof that it was the tenant's responsibility.  

The glimmer of hope through this whole time was that our tenants had filed a liability claim through their insurance.  In a pure stroke of luck, both policies (ours and the tenant's) were through the same insurance company so it meant that we didn't have to go meet with another adjuster and have more pictures taken, etc.  

The next day we received the call that allowed us to sleep again...

The liability insurance was going to pay.  The tenant was found responsible for the damage, so their policy would pay.  It felt like a hundred tons had been lifted.  There was still a lot up in the air as liability insurance is very different than a Home Owner's policy, but at least we knew that we weren't going to be on the hook for the full amount (which was quickly getting close to the $100,000 mark).

For the last 4 weeks we have been working close with the tenants, the insurance company and the restoration company to figure out what our next steps are.   Our tenants have given notice and will be moving out at the end of April.  We expected it as they need a place to house their employees.  The water was turned back on and it was discovered that the pipes needed more repairs than expected.  The restoration company has spent the last week fixing the plumbing and trying to estimate the extent of the damage.

For now we know that the replacement list includes the hardwood, much of the drywall on the main floor, the kitchen cabinets, the countertop, the lino in the entryway and in all bathrooms, the baseboards and all door casing, most of the doors, and the insulation on one wall and in the garage.  As of right now they think that the carpet can be cleaned instead of needing to be replaced.   It's a lot.  It's actually too much to wrap my brain around sometimes.

So far thee liability insurance has covered everything (and we are VERY thankful).  We will be out a bit once the tenants move out, but it is still way better than what we had originally thought.  We still don't know what will happen in the end once we start picking out finishings, but our goal is to get the place back looking like it did and to not pick finishings that will cost us extra money.  We are trying our best to ensure this is done as quickly as possible.

The Future
Needless to say, our plans for moving this spring have now been put on hold.  We are really thinking that once the rental is fixed that we will be selling it.  It was a good deal when we had long term tenants, but we are too far away to deal with finding new tenants and we don't make enough money off the rental to hire a property management company.  Our mortgage term is also up in June, so it makes sense timing wise to think of selling.  Unfortunately, until we know when the repairs are going to be finished and when/if it can go on the market, we can't make a move with our own house.

Although this has been a huge stressor in our lives lately, I know it's not the end of the world.  Even if insurance hadn't paid we would have survived, but we are glad that we didn't have to go there (and accumulate way more debt than we are comfortable with!).  I don't want to sound whiny and ungrateful, but I am bummed that the plans we had worked so hard for aren't going to happen the way we wanted them to.  We still have a roof over our heads (and a pretty nice one at that), but we were so looking forward to tackling a new house and spending the summer out on a big lawn with green grass playing with Fin and Dief.

Slowly I am getting over myself and our plans.  We will get there, it just won't be as quickly as we had hoped.  We will take the time to build up more of a down payment for a new house, which will be a good thing in the end.  Hopefully the market will be good in the spring and it will only raise property values to help to sell our rental house and to raise the value of our current house.  My hope is that we will still be able to list our house in the fall.  If it doesn't happen, then it doesn't happen.  We will wait it out another winter and start next year with renewed hope.

Through this whole ordeal we have learnt so much.  We've definitely leaned to read insurance policies carefully!  You'd think I would have known that since I actually deal with contracts for a living!  It's also been a lesson in standing up for yourself.  We joke in our house about me being a dragon lady....give me a bone and I won't let go.  Mr. Swell has told me numerous times in the last couple of weeks to unleash the inner dragon.  It's not to say that I am mean to anyone, but it does mean that I don't lay down and let people walk all over us.  I don't think everyone has us in their best interest, so it's up to us to make sure that our voices are heard.  I also think we were a bit naive about our rental situation.  We had a deal in place with the company to rent our house and just assumed they were doing everything they said they would (5 years ago).  We checked on the house a few times a year, but we never questioned very much.  When our main contact changed a few years ago we didn't sit down and have a conversation to ensure the same understanding was still in place.  The rent kept coming in and we kept assuming all was fine.  It was an assumption that we shouldn't have made.  Live and learn, right?  I can tell you with some certainty that if we ever go away for the winter (which we do tend to do), someone will be checking our house EVERY SINGLE DAY.  I can't even image if this had happened to our own house and the insurance had denied.  I am also so, so grateful that we sat down a few years ago and made a dedicated bank account for the rental that we put money in each month just in case of an emergency.  Although the money isn't even close to enough to cover all of this damage, it is enough to cover rent for  6 months, which makes everything a little less stressful.  Yay for financial planning!

We will be spending some time over the next couple of months picking out new finishings for the rental with the goal of modernizing it and making it the most appealing house we can to sell (or possibility rent again).  Don't be surprised if I am pestering you with questions and opinions as we choose the new stuff!   (Hope that's ok....we want to make sure our choices appeal to the masses....and you know...you are my masses :)  You know I'll keep you in the loop and will hopefully have some more pictures of a house being put together over the next few months.

I hadn't intended this story to be 2 full posts, but once I sat down to write it just kept coming and coming - so thank you for bearing with me through it all.  I have felt for the last month like I wasn't talking about this huge thing that had affected our lives, and that I just kept on blogging as if everything was hunky dory.  I needed to wait until the insurance situation was sorted out before I opened up about any of it.  I guess what I am trying to say is 'thanks'.  To those of you who have already reached out and told me to hang in there, please know that I so appreciate it.  I am hoping that I won't have another couple of epic posts like this again any time soon!


  1. Wow - girl, yall have really been through it! Im really glad that you could sit down and write about it though, I know that probably wasnt the easiest thing to do.

    What got me most was the photo of the exploded toilet. I showed that to my husband this morning and even he had to say "Whoa!" Truly amazing what the force of frozen water can do.

    Were still dealing with the after effects of water damage caused by frozen pipes in our own home prior to closing - although for us, its minor, very minor in comparison and something that has only created additional projects to do down the road - its mostly cosmetic in our case.

    Hoping for smoother sailing during the renovation and restoration work!

    1. Thanks Erica! It really is crazy what ice can do, isnt it? Its some powerful stuff!
      Sorry to hear that you are dealing with ice issues too.....it sucks if its big or its small.

  2. when life gives you ice, make margaritas! i think that might be a more appropriate title. :) wow wow wow....so scary! we have never leased out a property- i think it sounds just like too much work and have no interest in it! this scares me even more- i hate dealing with legal crap!

  3. Oh my gosh, what a story!! What an ordeal youve been though and thats amazing what a frozen toilet can do. Thanks for the reminder to read though our insurance policy too - thank you, thank you. Bloggy hugs and take care.

  4. Thankfully the liability insurance helped cover it all. Id be so stressed out, I couldnt manage! Wow!

    1. I think there is a point where you are so stressed that you just sort of stop worrying about it. Thats what I did for a few days! Thanks for the comment.

  5. Oh my goodness, Kelly - my heart goes out to you!!! I can empathize about floods and the damage and stress that they bring! We had our 2nd floor washroom flood about 6 years ago and just this January, our powder room washroom flooded - we had to have major work done with the first one and luckily the second one wasnt so bad, but we lost A LOT of personal items that were completely damaged :(

    Hugs to you! Nice to meet you, just sad its under these circumstances :) Im from SheBlogs.

  6. Holy cow, that is amazing. What a mess! So glad that things are working out for you now (even if theyve derailed your plans for the time being ... but at least thats all it is ... slight off course for now ... and things can get back on track again soon, hopefully!) Best wishes from a neighbour in Edmonton.

    1. Yes, I hope they get back on track soon! So nice to meet another blogger from Edmonton....your jewellery is lovely.

  7. I cannot believe this happened to you. This sounds like a terrible situation to be stuck with! Thankfully the tenants insurance came through. I can say that I will be extra careful reading through my home insurance when we finally buy a house - so by telling your story you may help others avoid the same thing.

    All in all, it sounds like you and your husband worked well together and made some really tough decisions on the fly. And with a little humour in the mix. Hows that for lemonade? ;)

  8. WOW that is scary! Im so happy that it all worked out!

  9. Not much to say here but "WOW"! Life can really hand it to you sometimes - so glad that this will work out in the end. I remember when I was first married and we bought our first house, we stored all our belongings in the garage while we refinished the floors. The garage flooded over July long weekend while we were away and we lost everything. While we were laying our wet, moldy things on the lawn trying to figure it all out, our new neighbours came over and shared their own "disaster" stories. Everyone had one! Good luck with your situation, I hope it all gets resolved soon.

    1. No kidding, right? Just when you think you have it all together then BLAM....deal with this! Thats horrible about your flood. Who would have thought that would happen? The thought of laying out wet mouldy stuff is just a bad, bad thought! Thanks so much for stopping by.

  10. Oh my goodness! Thats so terrible. We have a rental house in a cold land (MN) while we live in TX, so I guess Im going to have to check out our insurance policies. Though we have regular year renters and not a company.

    Im glad to hear that generally everything is working out. We wanted to buy a home this spring, but I think we are also going to have to wait a year so we can afford what we want. Well hang in there together and waiting will be for the best in the end.

    1. Jill - yes...check your policy for sure! Its totally one of those things thats easy to neglect. Ok - we will hang in there together? Can I write you and complain when I am feeling like we are all on top of each other in this house??

  11. Kelly... I was on pins and needles reading your story! I can relate to the stress and anxiety that a situation like this brings. We have had a few times in our married life where we had to regroup and make a new plan... it is disappointing and overwhelming but you just do it. I can honestly say that looking back some of those regrouping times actually led us in a direction that changed our lives in a very positive way! You have the right attitude, things will work out!

    1. Thanks Cynthia. I am really hoping that it will all work out better in the end....the waiting is just so frustrating! Thanks so much for your lovely comment.

  12. Holy smokes, Kelly...you had me reading all of this out loud to my hubby tonight. We own a couple rentals and rent to college age kids and I do know that if for some reason they turn the furnace off, the company will automatically keep it on in our name, but I KNOW they leave for Christmas Break and we do not check the place. So, we are now going to rewrite the lease to include that and make sure we are checking it out when they leave! So scary!!! I about died when you said $100,000!!!?!? I am so sorry that happened to you guys...Im sure there will be a big silver lining revealed in time. Thank you so much for writing about this, too. Something we had NEVER thought about! ;) Jesse @ Scout & Nimble

    1. Your read out loud and your hubby didnt think I was cuckoo? Its totally worth putting it in the lease....I wouldnt want this to happen to anyone else. We always thought that the standard lease covered us (even our insurance agent said its rare to see such specifics in a lease), but when the rubber met the road it didnt stand up. And yes...we are at $100K - its crazy, right? Its about a third of what the house is worth! Nuts.
      Thanks so much for your comment....I truly do appreciate it!

  13. Kelly,

    I just read both posts back to back and oh my! You must be (have been) so overwhelmed. I was stunned in what I learned while reading - especially about insurance contracts. Thank you so much for sharing. I think your attitude is incredibly impressive and I wish you and your family a silver lining soon.

    1. Stacey - yes, we were overwhelmed, but just kept telling ourselves to take it one step and a time (which if you tell yourselves enough times it actually seems to work!). Thanks so much for stopping by and leaving a comment.

  14. Holy smokes, Kelly! What an ordeal. Im really glad that the insurance ended coming through for your guys, even if it was through the tenants. I am very blessed to have an dragon of an insurance broker for a father-in-law, because Ive heard too many stories like this. Hopefully the worst is over for you guys for now. Good things to come!

  15. Thank you for this post! I am now going to read my Insurance policy closely and make notes that I can refer to when (hopefully never) I need to. Weve traveled in the summer and had someone checking on our house every few days...but this winter we plan on leaving for 2 weeks. I will certainly have our friend/neighbor check the thermostat, heater, and water heater every single day! Not sure if that is in our policy just yet, but obviously one cant be too careful! Thanks again!

    One thought for you. Maybe JUST maybe, the home of your dreams just wasnt available this year. Perhaps the home that is meant for your family will be waiting for you when you are ready to buy. Im always looking for the positives in a horrible situation. I think you are dealing well with this nightmare. Just keep chugging along, and your dream home is right around the corner of the calendar. :-)

    1. Totally true - you can never be too careful. I wont go anywhere now without having someone check it every day in the winter.

      And thank you for your positive vibes. After having some time to reflect since all of this happened, we know that you are right. Things will fall into place when they are meant to. I am sure we could have found a good house in the spring, but now hopefully we will find an ever better one in the summer!

      Thanks for the comment.


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