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Insurance ? on no permit install

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EBEBRATT-Ed
EBEBRATT-Ed Member Posts: 18,275
in THE MAIN WALL
Oil installation in MA. and nothing the Fire Marshall could do??? Call The MA. Dept. of Public Safety and turn the buggers in. They are the one's that issue the cert. of competency oil burner license. Or better yet have the homeowner turn them in.

Ed

Comments

  • jrc2905
    jrc2905 Member Posts: 98
    Homeowners insurance question

    Can anyone tell me what a Homeowner insurance company policy is when it comes to a homeowners insurance claim on a heating system that was installed without any permit. What should I tell the homeowner in a situation like this.
    The reason I ask this is, that I have a customer with a year old system that needs code issues corrected that I found during a repair, such as “low temp soldered fitting on oil line, extra oil line from the top of the oil thank that goes underground to old shed in back yard for old pool heater and several other issues.” The new homeowner checked with City Hall and no permit was pulled for this job. Fire inspector came to house at homeowners request and said it looked ok to him and because it was already installed there was nothing he could do. I feel like I am being put in the middle working and correcting these problems on system with no permit. This job is in Mass. I will not name the town. Thanks
  • jrc2905
    jrc2905 Member Posts: 98


    I told the homeowner to call the fire inspector and let him know that they were going to call the building inspection department. I did not want the fire inspector to think that they were going behind his back, maybe he will reconsider the situation.
  • ed wallace
    ed wallace Member Posts: 1,612
    no permit

    calling the buiding dept will do no good they do not have jurisdiction on oil burner installs only the fire dept and state fire marshalls office can help your customer

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  • Leo
    Leo Member Posts: 772
    What are you looking for?

    In order for the Fire Insp to do anything he/she needs some one to go after. Right now they only have the owner. If I were you I would do the work and bill for it, document everything you did and why. Let the owner go after the former owner, there should have been disclaimers signed if they used a realestate agent.
    I too live in Mass.

    Leo
  • jrc2905
    jrc2905 Member Posts: 98


    The building department can get involved because of the domestic water involved. But to be realistic, I have to work in this town and do not want to step on inspectors toes. We all know how that works.
    No one has answered my question on how the lack of a permit affects the homeowners insurance, does it?
  • Brad White_49
    Brad White_49 Member Posts: 14
    Insurance

    Generally the insurance issue in this instance would only become an issue if you "needed it". IOW, if there was a claim. Despite stock policies (The HO series) the language in them gives benefit to the insurance company first; the right to deny. Theory is, it allows them to maintain their margin of solvency. By denying claims that are bogus or specious, they maintain the reserves that are required by law for greater disasters..

    Work installed without a permit is just one "out" for them. Any reason to deny a claim is a good one and they look for them. There is lots of work out there done without a permit but would meet code and we all know a lot that does not. Either one gives an excuse.

    If non-permitted work *did* meet code you can always go back, tail between your legs, pay the fine (double permit fee plus a stipend usually) and get it permitted retroactively.

    But it also gets down to disclosure, what a party knew and when they knew it and who was informed.

    Say the HO did not know any of the issues, bought the house in good faith. Oil line ruptures, a huge mess or worse, a fire ensues and the house is destroyed. Insurance is obligated to pay but has the recourse, if cause is discovered, to go after the installer, home inspector for missing it, or any other party they can drag in.


    Say the HO *did* know, even after the fact, but did not disclose. Then it is a willful withholding of material information. Again, no fire or leak, no issue. But then, why have insurance?


    Third scenario: Say the HO knows what you all know now and does disclose in good faith. Or the insurance company is tipped off by an AHJ.

    The insurance company can demand that the work be corrected if they deem it serious enough, give a cancellation notice with a time limit to correct the work or cancel the policy outright. There is language in most policies ambiguous enough to allow that (HO-3 for example).

    If the insurance company is tipped off by the AHJ and it becomes apparent that the HO knew and did not disclose or asked that it not be, then the insurance company would take the stronger action IMHO.

    Remember- Insurance is a bet: You are betting that you will have a disaster. The insurance company is saying you will not. If they are wrong, they pay. But the risk factors have to be known.

    My $0.02

    Brad
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